Contribution margin per unit =Selling price per unit - Variable cost per unit = $ 60 - $ ( 7.50 + 10.00 + 3.20 + 3.70 ) = $ 35.60
1-a. Financial advantage ( disadvantage ) = 86,000 x 40 % x $ 35.60 - $ 140,000 = $ 1,084,640.
1-b. Yes.
2.
Break-even price per unit | $ 27.00 |
Variable manufacturing cost per unit | $ 20.70 |
Import duty | 3.70 |
Permits and licenses ( $ 27,520 / 34,400) | 0.80 |
Shipping cost | 1.80 |
Break-even price per unit | $ 27.00 |
3.
Relevant unit cost | $ 3.70 | per | unit |
4.
Foregone contribution margin ( 86,000 / 6 x 25 % x $ 35.60 ) | - $ 127,563.70 |
Total avoidable fixed costs ( 516,000 / 6 x 65 % + 258,000 / 6 x 20 % ) | 64,500 |
Financial disadvantage | - $ 63,063.70 |
5.
Avoidable cost per unit | $ 23.73 |
Variable manufacturing costs per unit | $ 20.70 |
Fixed manufacturing cost | 1.80 |
Variable selling expenses | 1.23 |
Avoidable cost per unit | $ 23.73 |
Andretti Company has a single product called a Dak. The company normally produces and sells 86,000...
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 $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...
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 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 10.00 2.80 9.00 ($720,000 total) 2.70 4.00 ($320,000 total) $37.00 A number of questions relating to the production and...
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 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 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...
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...
Save & Exit 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 $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 11.00 2.20 6.00 (5480,000 total) 3.70 4.00 ($320,000 total) $35.40 A number of questions relating to...
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...