An automated machine has been developed that can produce several components of the amplifiers. If the machine is purchased, fixed expenses will increase to $315,000 per year. The firm's production capacity will increase, which is expected to result in a 25 percent increase in sales volume. It is also estimated that the variable expense ratio will be reduced to half of what it is now.

(a.) Calculate the firm's current contribution margin per unit and break-even point in units.
(b.) Calculate the firm's contribution margin per unit and break-even point in terms of units if the new machine is purchased.
(c.) Calculate the firm's operating income assuming that the new machine is purchased.

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Break even point
Brazen, Inc. produces sound amplifiers for electric guitars. The firm's income statement showed the following:

Sales ( 30,000 caps @ $50)- 1,500,000
Less vairable expenses- 900000
contributionmargin- 600000
less fixed expenses- 280000
net income- 320000
Find the contributionmargin and the break even point in both units and dollars.

Farrell Company manufactures a product that sells for $50 per unit. Farrell incurs a variable cost per unit of $30 and $3,400,000 in total fixed costs to produce this product. They are currently selling 200,000 units.
Instructions: Complete each of the following requirements, presenting labeled supporting computations.
(a)

Prepare a contributionmargin (behavioral, variable) income statement for Herrestad Company, compare net operating profit from a contributionmarginincome statement with net income from an absorption income statement, and explain why this difference happens. Prepare a second version assuming the selling price per unit increases

For the current year ending April 30, Phillip Company expects fixed costs of $70,000, a unit variable cost of $60, and a unit selling price of $95.
(a) Compute the anticipated break-even sales (units).
(b) Compute the sales (units) required to realize an operating profit of $8,000.

Baker Company has a product that sells for $20 per unit. The variable expenses are $12 perunit, and fixed expenses total $30,000 per year.
Required:
a. What is the total contributionmargin at the break-even point?
b. What is the contributionmargin ratio for the product?
c. If t

Brazen, Inc. produces sound amplifiers for electric guitars. The firm's income statement showed the following:
Revenues (8,400 units) $504,000 100%
Variable expenses (302,400) 60%
Contributionmargin $201,600 40%
Fixed expenses (140,400)
Operating income $61,200
An autom

1. South Company sells a single product for $20 per unit. If variable expenses are 60% of sales and fixed expenses total $9,600, the break-even point will be:
A. $24,000
B. $14,400
C. $9,600
D. $16,000
2. Arthur Company has a margin of safety percentage of 25%. The break-even point is $300,000 and the variable expenses

Andre has asked you to evaluate his business, Andre's Hair Styling. Andre has five barbers working for him. (Andre is not one of them.) Each barber is paid $9.90 per hour and works a 40-hour week and a 50-week year, regardless of the number of haircuts. Rent and other fixed expenses are $1,750 per month. Assume that the only ser

At the break-even point:
A)sales would be equal to contributionmargin
B)contributionmargin would be equal to fixed expenses
C)contributionmargin would be equal to net operating income
D)sales would be equal to fixed expenses
Rovinsky Corporation, a company that produced and sells a single product, has provided its cont