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Exercise 8-12 The Cycle Division of Ayala Company has the following per unit data related to its most recent cycle called RoaYour answer is partially correct. Try again. Assume that FrameBody does not have excess capacity and therefore would lose sal

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Answer #1
1 effect on the income of the cycle division is $31500
2 effect on the incoem of frame body is $ 13650
3 efect on the total incoem of ayala is $45150
working
no.of frames 1050
framebody cycle division
s.p (from cycle division)(A) $275 305
VC(B) $262 275
cont. p.u(A-B) 13 30
total contribution(cont. p.u * 1050) 13650 31500
1 effect on the income of the cycle division is $31500
2 effect on the incoem of frame body is -$80850
3

efect on the total incoem of ayala is -$49350(31500-80850)

working
no.of frames 1050 if it sells outside
framebody cycle division framebody
s.p (from cycle division)(A) $275 305 352
VC(B) $262 275 262
cont. p.u(A-B) 13 30 90
total contribution(cont. p.u * 1050) 13650 31500
opportunity cost framebody
cont. p.u 13
less opp. Cost 90
loss p.u. -77
total contribution loss -80850
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