Homework Answers
Break even point in units = Fixed costs/Contribution margin per unit
= (345000+25000)/(50-25)
= $14,800 units
Relevant cost of making = $14000+5500+9000
= $28,500
Hence, make and save $6500
Net benefit of manufacturing further = 67500-27000-20250
= $20,250
Hence, manufacture further and sell it for 67500
Benefit of processing = (14-8)*28000 – 187600
= -$19,600
Sell now, company will be better off by $19600
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