Ozark inc produces small replicas of vintage automobiles for collectors and muse

Question

Ozark inc produces small replicas of vintage automobiles for collectors and museums..

Revenues (2400 units.......1,584,000 variable expenses 871,200 contribution margin 712,800 fixed expenses 520,000 operating income 192,800

An automated stamping machine has been develooped that can efficiently produce body frames, hoods, and doors to the desired scale. If the machine is leased, fixed expenses will increase by 58,000 per year. The firm's production capacity will increase, which is expected to result in a 25% increase in sales volume. It is also estimated that laor costs of $33 per unit could be saved because less polishing and finishing tie will be requires.

A. The firm's current break-even point in units

B. The firm's break even point in units if the new machine is leased

C. The firm's operating income if the new machine leased

D. Should Ozark lease the new machine? Explain

Explanation / Answer

a) Calculate the firm

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