Answer 1 - a
Increased Sales in units | $ 20,250 |
Contribution margin per unit | $ 35.80 |
Incremental Contribution | $ 724,950 |
Added Fixed expense | $ 140,000 |
Incremental net income | $ 584,950 |
Answer 1 - b
Yes |
Answer 2
Variable manufacturing Cost per Unit | $ 21.50 |
Import duties per unit | $ 3.70 |
Permits | $ 0.70 |
Shipping Cost | $ 1.60 |
Break-even price per unit | $ 27.50 |
Answer 3
Relevant unit cost | $ 4.70 |
Only Variable selling cost is considered. This is because all other costs are already incurred and are irrelevant for decision making.
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