Image 2021-08-18 at 11.58.57 AM U.jpgAdd toretion Status:* Edit & Create vIA ShareQUESTION 3Claypool Ltd sold 30,000 units of its product for $50 per unit in 2020. Variable cost per unit is $30 and total fixed costs are $350,000. Tax rate is 30%. The after-tax profit for year2020 is $175,000.Claypool's production manager, Paul Andon, is preparing the production plan for 2021. He believes that Claypool's current manufacturing process is labour intensive therefore, thevariable cost is high. He has proposed investing in state-of-the-art manufacturing equipment which will reduce the number of labour hours needed for production. If Claypool Ltdinvests in the manufacturing equipment, the annual fixed cost will increase by $120,000 and the variable cost will decrease$12 per unit.Required:a. Calculate the quantity of products Claypool Ltd would need to sell in year 2021 to achieve the same profit as year 2020.b. Should Claypool Ltd invest in the manufacturing equipment? Why or why not? (-*Please indicate which question you are answering for each.For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac).BIU s10pt三、三v AParagraphArialSave All AnswersClose Windowtick Save and Submit to save and submit. Click Save All Answers to save all answers.DELL1257

We know that under marginal costing Profit = Sales Revenue - Total Variable cost - Total Fixed…

QUESTION 3 Claypool Ltd sold 30,000 units of its product for $50 per unit in 2020. Variable cost per unit is $30 and total fixed costs are $350,000. Tax rate is 30% The after-tax profa for year 2020 is $175,000. Claypool's production manager, Paul Andon, is preparing the production plan for 2021, He believes that Claypool's current manufacturing process is labour intensive therefore, the variable cost is high. He has proposed investing in state-of-the-art manufacturing equipment which will reduce the number of labour hours needed for production. If Claypool Lud invests in the manufacturing equipment, the annual fixed cost will increase by $120,000 and the variable cost will decrease by $12 per unit. Required: a. Calculate the quantity of products Claypool Ltd would need to sell in year 2021 to achieve the same profit as year 2020. b. Should Claypool Ltd invest in the manufacturing equipment? Why or why not? -

QUESTION 3 Claypool Ltd sold 30,000 units of its product for $50 per unit in 2020. Variable cost per unit is $30 and total fixed costs are $350,000. Tax rate is 30% The after-tax profa for year 2020 is $175,000. Claypool's production manager, Paul Andon, is preparing the production plan for 2021, He believes that Claypool's current manufacturing process is labour intensive therefore, the variable cost is high. He has proposed investing in state-of-the-art manufacturing equipment which will reduce the number of labour hours needed for production. If Claypool Lud invests in the manufacturing equipment, the annual fixed cost will increase by $120,000 and the variable cost will decrease by $12 per unit. Required: a. Calculate the quantity of products Claypool Ltd would need to sell in year 2021 to achieve the same profit as year 2020. b. Should Claypool Ltd invest in the manufacturing equipment? Why or why not? -

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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