N \& M Company is into furniture business specialized in dining sets. Last year, sales...
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N \& M Company is into furniture business specialized in dining sets. Last year, sales volume totaled 9850,000 . Volume for the first five months of the current year totaled $600,000, and sales were expected to be $1,600,000 for the entire year. Unfortunately, the furniture business in the region where N&M is located, specifically, wood dining sets, is very competitive. More than 100 dining set shops are all competing for the same business. The company offers two different quality wood dining sets: Narra and Molave, with Narra being the higher quality. The average unit selling prices, unit variable costs, and direct fixed costs are as follows: dining sets sold, seven Molave dining sets are sold. Required 7. N \& M can buy computer-controlled machines that will make production of the dining sets faster and meet the demands of the customers. If the machines are purchased, the variable costs for each type of dining set will decrease by 9 percent, but the common fixed costs will increase by p44,000. Compute the effect on operating income, and also calculate the new break-even point. Assume the machines are purchased at the beginning of the sixth month. Fixed costs for the computer are incurred uniformly throughout the year
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