Raiden Global Corporation 2015 budget indicates it will produce and sell 40,000 units of its sole product in the current year. At that volume level, it projects a sales price of $30 per unit, a contribution margin ratio of 40 percent, and total fixed costs of $200,000.
a. What is the company's projected.
Operating Income
Operating Leverage
Break-even point in dollars
Margin of Safety in units
b. What sales volume would be required for Raiden to obtain a net income of $150,000? Assume Raiden's effective tax rate is 25%
c. Assume that the company has an opportunity to invest in a new technology that would increase its fixed costs by $5,000. If everything else in the budget remains the same, should the company invest in the new technology?