Riveria Co. makes and sells a single product. The current selling price is $32 per unit. Variable expenses are $20 per unit, and fixed expenses total $43,200 per month. Sales volume for May totaled 4,100 units. Required: a. Calculate operating income for May. b. Calculate the breakeven point in terms of units sold and total revenues. c. Management is considering installing automated equipment to reduce direct labor cost. If this were done, variable expenses would drop to $14 per unit, but fixed expenses would increase to $67,800 per month. 1. Calculate operating income at a volume of 4,100 units per month with the new cost structure. 2. Calculate the breakeven point in units with the new cost structure. (Round your answer.) 3. Why would you suggest that management seriously consider investing in the automated equipment and accept the new cost structure

Self-interest achieve society’s economic goals because producers know which goods consumers want the most. as consumers and producers exercise their freedom to act in their own self-interest, markets will produce the desired goods at the lowest possible cost. consumers and producers both operate based on society’s economic goals. consumers know which goods can be produced at the lowest cost. there is a wide variety of desired goods and services in a market system because producers determine what to produce. consumers change their minds frequently. there is always a need to produce something new and improved. individual wants are diverse. what is produced is ultimately determined by consumers, because if the goods offered are not what consumers want, consumers will not buy them. producers, because they are driven by profits. producers, because they determine what to produce. consumers, because they participate in marketing surveys.