Houston-based Advanced Electronics manufactures audio speakers for desktop computers. The following data relate to the p
Posted: Sun Jul 03, 2022 3:56 pm
Houston-based Advanced Electronics manufactures audio speakersfor desktop computers. The following data relate to the period justended when the company produced and sold 42,000 speaker sets:
Management is considering relocating its manufacturing facilitiesto northern Mexico to reduce costs. Variable costs are expected toaverage $18.00 per set; annual fixed costs are anticipated to be$1,992,000. (In the following requirements, ignore incometaxes.)
3. Assume that management desires toachieve the Mexican break-even point; however, operations willremain in the United States.a. If variable costs remain constant, by how much must fixed costschange?b. If fixed costs remain constant, by how much must unit variablecost change?
Management is considering relocating its manufacturing facilitiesto northern Mexico to reduce costs. Variable costs are expected toaverage $18.00 per set; annual fixed costs are anticipated to be$1,992,000. (In the following requirements, ignore incometaxes.)
3. Assume that management desires toachieve the Mexican break-even point; however, operations willremain in the United States.a. If variable costs remain constant, by how much must fixed costschange?b. If fixed costs remain constant, by how much must unit variablecost change?