Karen Company manufactures 5,000 high-end racing bicycles ea…

Karen Company manufactures 5,000 high-end racing bicycles each period.  Karen Company has been making all the components for the bikes, but a supplier has approached Karen Company with an offer to sell her bicycle seats at a price of $40.  The current cost per unit of manufacturing one bicycle seat is computed as follows: Direct Material                              $10 (variable) Direct Labor                                     $18 (variable) Manufacturing overhead          $10  (100% Fixed) If the 5,000 bicycle seats are purchased from the outside supplier, $1 per unit of the fixed manufacturing overhead costs can be avoided. If Karen Company purchases the seats, the facility used to manufacture the seats would be rented for $20,000 per period.  All of the Direct Material and Direct Labor are variable.   If Karen Company chooses to purchase the bicycle seats, then the change in annual net operating income is:

O’Hara, Inc. sells two products, X and Y. For every unit of…

O’Hara, Inc. sells two products, X and Y. For every unit of X the firm sells, three units of Y are sold. The firm’s total fixed costs are $1,680,000 and its tax rate is 20%. Selling prices and variable cost information for both products are below:                                        Product X       Product Y Selling price                   $80                 $40 Variable cost/unit       $48                 $20   O’Hara Inc. desires a before-tax profit of $620,000.    How many units of X do they need to sell to reach their before-tax profit target? (Round to the next highest unit, if necessary)