Question

Question:

Part 1. Gary and Joy developed a neat Bento box for children. The shape of the containers encourages healthy eating and it is very popular. They have been paying another company to manufacture the boxes for them but are interested in manufacturing the boxes themselves. They've developed the following cost estimates:

Sales (100,000 units)$       1,000,000Costs:FixedVariable  Raw Materials$                  0$         300,000  Direct Labor0200,000  Factory Costs100,000150,000  Selling and Administrative Costs110,00050,000Total Costs$     210,000$        700,000Operating Income$           90,000

1. How many units will Gary and Joy need to sell to breakeven?
2. If Gary and Joy incorporate, and the corporate tax rate is 40%, how many units will they need to sell to earn $90,000 after tax?

ANSWER

1.70000 Units

2.120000 Units

Part 2.  Gary and Joy are concerned that the estimated fixed costs are too low. They believe that they'll need additional equipment, increasing their fixed costs by $ 31,500. Also, there has been a change in the corporate tax rate.  Adjust your analysis to assume an increase of $31.500 in fixed costs and the new corporate income tax rate.

1. prepare a schedule summarizing the effects of the change.
2. Discuss the impacts on break even units of adding additional fixed costs.
3. What would the impact on break even units be if the company increased advertising by $40,000?

the 2018 corporate tax rate needs to be found online and cited in APA

PT1 was already solved, I just need help with PT2

Answer 1