Required: a) breakeven in units and dollars; b) assume management wants to earn $15000000 in operating income how many units must be sold; c) assume income tax rates are 35% of pre-tax income and management wants to earn $13000000 after tax- how many units are required; d) for 2015 what is the margin of safety in dollars and percentage; e) what is the operating leverage in 2015; the production manager wants to automate production and lower variable costs by $2 per unit and spend an additional $4000000 fixed costs per year- is this a good idea?
The sales manager wants to drop prices by $2 per unit and spend an added $300000 on advertising while volume increase by 150000 units- is this a good idea?