Contribution margin | ||||||||
selling price per unit | 56 | |||||||
less Variable expenses | ||||||||
direct materials | 8.5 | |||||||
direct labor | 10 | |||||||
Variable manufacturing overhead | 2.8 | |||||||
variable selling expense | 2.7 | 24 | ||||||
Contribution margin per unit | 32 | |||||||
Req 1A | increased sales in units | 80000*20%= | 16000 | |||||
contribution margin per unit | 32 | |||||||
incremental contribution margin | 512000 | |||||||
less added fixed selling expense | 150,000 | |||||||
incremental net operarting income | 362,000 | |||||||
1-b) | Yes | |||||||
Req 2 | Break even price per unit | |||||||
Variable manufacturing cost per unit | 21.3 | |||||||
Shipping cost | 1.9 | |||||||
import duties | 2.7 | |||||||
permits &licences | 0.9 | |||||||
Break even price per unit | 26.8 | answer | ||||||
Req 3 | Relevant unit cost | $2.70 | per unit | |||||
4) | Foregone contribution margin | (3333*32) | 106656.00 | |||||
total avoidable fixed cost | ||||||||
fixed manufacturing overhead cost | (720000*2/12)*65% | 78000 | ||||||
fixed selling cost | (320000*2/12)*20% | 10667 | 88666.67 | |||||
Financial disadvantage | -17989.33 | |||||||
80,000*2/12*25%= | 3333.333 | units | ||||||
No | ||||||||
5) | Variable manfuacturing costs | 21.3 | ||||||
fixed manufacturing overhead cost | (9*30%)= | 2.7 | ||||||
variable selling expense | 2.7*1/3 | 0.90 | ||||||
total costs avoided | 24.90 |
Andretti Company has a single product called a Dak. The company normally produces and sells 80,000...
Andretti Company has a single product called a Dak. The company normally produces and sells 80,000 Daks each year at a selling price of $54 per unit. The company’s unit costs at this level of activity are given below: Direct materials $ 8.50 Direct labor 8.00 Variable manufacturing overhead 1.80 Fixed manufacturing overhead 9.00 ($720,000 total) Variable selling expenses 1.70 Fixed selling expenses 4.50 ($360,000 total) Total cost per unit $ 33.50 A number of questions relating to the production...
Andretti Company has a single product called a Dak. The company normally produces and sells 80,000 Daks each year at a selling price of $56 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $ 8.50 11.00 3.70 10.00 ($800,000 total) 3.70 3.00 ($240,000 total) $39.90 A number of questions relating to the production and...
Andretti Company has a single product called a Dak. The company normally produces and sells 82,000 Daks each year at a selling price of $60 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $ 8.50 10.00 2.70 7.00 ($574,000 total) 1.70 3.00 ($246,000 total) $32.90 A number of questions relating to the production and...
Andretti Company has a single product called a Dak. The company normally produces and sells 84,000 Daks each year at a selling price of $56 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $ 6.50 9.00 2.50 4.60 ($336,000 total) 4.70 3.00 ($252,000 total) $ 29.70 A number of questions relating to the production...
Andretti Company has a single product called a Dak. The company normally produces and sells 85,000 Daks each year at a selling price of $64 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $ 7.50 11.00 3.40 7.00 ($595,000 total) 1.70 3.00 ($255,000 total) $33.60 A number of questions relating to the production and...
Andretti Company has a single product called a Dak. The company normally produces and sells 86,000 Daks each year at a selling price of $60 per unit. The company's unit costs at this level of activity are given below: $ 7.50 10.00 Direct materials Direct labor Variable manufacturing overhead Fixed Ranfacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit 6.00 ($516,000 total) 3. 70 3.00 ($258.000 total) $ 33,40 A number of questions relating to the production...
Andretti Company has a single product called a Dak. The company normally produces and sells 86,000 Daks each year at a selling price of $60 per unit. The company's unit costs at this level of activity are given below: $ 7.50 10.00 Direct materials Direct labor Variable manufacturing overhead Fixed Ranfacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit 6.00 ($516,000 total) 3. 70 3.00 ($258.000 total) $ 33,40 A number of questions relating to the production...
Andretti Company has a single product called a Dak. The company normally produces and sells 81,000 Daks each year at a selling price of $58 per unit. The company's unit costs at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Pixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $ 6.50 9.00 2.70 8.00 ($648,000 total) 2.70 2.50 ($202,500 total) $31.40 A number of questions relating to the production and...
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Andretti Company has a single product called a Dak. The company normally produces and sells 86,000 Daks each year at a selling price of $58 per unit. The company’s unit costs at this level of activity are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses Total cost per unit $ 9.50 11.00 3.50 9.00 ($774,000 total) 4.70 4.50 $387,000 total) $42.20 A number of questions relating to the production and...