Answer 1 - a
Financial advantage | $ 710,625 |
Calculations:
Increased Sales in units | $ 20,250 |
Conribution margin per unit | $ 42.50 |
Incremental Contribution | $ 860,625 |
Added Fixed expense | $ 150,000 |
Incremental net income | $ 710,625 |
Answer 1 - b
Yes
Answer 2
Variable manufacturing Cost per Unit | $ 19.80 |
Import duties per unit | $ 2.70 |
Permits | $ 0.80 |
Shipping Cost | $ 2.20 |
Break even price per unit | $ 25.50 |
Answer 3
Relevant unit cost | $ 1.70 |
Explanation:
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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