RECOMMENDED!!Calculate Current Break-Even Point in Units Sold, Revenue

  

Calculate Current Break-Even Point in Units Sold, Revenue11. What is the purpose of the explanatory notes and other
financial information that is presented in the annual report in conjunction
with the financial statements? Describe three items that will be presented in
this section of the annual report.12. Preppy Co. makes and sells a single product. The current
selling price is $30 per unit. Variable costs are $21 per unit, and fixed
expenses total $90,000 per month. Sales volume for July totaled 12,000 units.
Operating income is presented below:Volume Per unit Total %Revenue 12,000 $30.00 $360,000 100Variable Expense 12,000 21.00 252,000 70Contribution Margin 12,000 $ 9.00 $108,000 30Fixed Expenses 90,000Operating Income $ 18,000a.Calculate the current break-even point in units sold and
total revenues.b.Management is considering the use of automated production
equipment. If this were done, variable costs would drop to $15.00 per unit, but
fixed expenses would increase to $100,000 per month.1.Calculate operating income at a volume of 12,000 units per
month with the new cost structure.2.Calculate the break-even point in units with the new cost
structure.
c.Do you believe management of Preppy Co. should purchase
the new equipment? Explain your answer.