Fashions,Inc.is a retail store that sells sweaters and jackets.In the past,it has bought all its sweaters from a supplier for $20 per unit and had no fixed costs for this line of clothing.However,Fashions has the opportunity to acquire a small manufacturing facility where it could produce its own sweaters.The projected data for producing its own sweaters are as follows:

Question

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Required:Round all answers to the nearest whole number.
(1)If Fashions acquired the manufacturing facility,how many sweaters would it have to produce in order to break even?
(2)To earn an after tax profit of $125,000,how many sweaters would Fashions have to sell if it buys the sweaters from the supplier? If it produces its own sweaters? Fashion's tax rate is 30%.
(3)Fashions is indifferent between the two alternatives at sales of how many units? (Ignore income tax effects)? Show a computation of operating income to prove your answer.
Please see Feedback for answers.
 Feedback: (1) 11ea6e70_bcc5_e678_8f54_491128458c30_TB1699_00 (2)(Buy) 11ea6e70_bcc5_e679_8f54_d5de302964d5_TB1699_00 (Produce) 11ea6e70_bcc6_0d8a_8f54_b3f6d06bc159_TB1699_00 (3) 11ea6e70_bcc6_0d8b_8f54_272d57e1b464_TB1699_00 Proof: 11ea6e70_bcc6_0d8c_8f54_67a37ab3a596_TB1699_00