please answer D ybusinesscourse.com/platform/mod/quiz/attempt.php?attempt-177610

Question

please answer D

ybusinesscourse.com/platform/mod/quiz/attempt.php?attempt-17761008page-5 E Menu CVP Analysis and Special Decisions Smoothie Citrus Company buys a variety of citrus fruit from growers and then processes the fruit into a product line of fresh fruit juices, and fruit flavorings. The most recent year's sales revenue was $4,400,000. Variable costs were 60 percent of sales and fixed costs totaled $1,400,000. Smoothie is evaluating two alternatives designed to enhance profitability . One staff member has proposed that Smoothie purchase more automated processing equipment. This strategy would increase fixed costs by $300.000 but decrease variable costs to 54 percent of sales . Another staff member has suggested that Smoothie rely more on outsourcing for fruit processing This would reduce fixed costs by $300.000 but increase variable costs to 65 percent of sales. Round your answers to the nearest whole number. (a) What is the current break-even point in sales dollars? $ 3.500,000 (b) Assuming an income tax rate of 34 percent what dollar sales volume is currently required to obtain an after-tax profit of $500,000? $ 5,393,940 (C) In the absence of income taxes, at what sales volume will both alternatives (automation and outsourcing) provide the same profit? s 5.454,545 (d) Briefly describe one strength and one weakness of both the automation and the outsourcing alternatives Automation has less risk and a lower break-even point F7 F8 F9 F10 F1 12 F4 F6

Explanation / Answer

Answer is "d" of question "d" because strength and weakness of both alternatives is asked. Only option "d" has 4 pointers.

Strength of Automation

Strength of outsourcing

Weakness of automation

Weakness of outsourcing

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