Contribution margin per Dak = selling price per Dak - variable cost per Dak
= 64 - 8.5-8-3-3.7
=$40.8
1.additional contribution margin = 18000*40.8 =$734,400
Less: additional cost =$100,000
Net benefit =$634,400
Yes
2.break even price =8.5+8+3+3.7+2.1+ 14400/18000
=$26.1 per unit
3. Relevant cost is the variable selling cost since manufacturing cost has already been incurred
I.e. $3.70 per unit
4.operating level = 90,000*25%*2/12 =3,750 units
A. Contribution margin lost =3750*40.8 =$153,000
B. Fixed costs avoided = 360,000*65%*2/12 + 360,000*20%*2/12
=$51,000
C. Advantage = 51000- 153,000 =$(102000)
D.should not close
5. Avoidable cost = 8.5+8+3+ 3.7*1/3 + 360,000*30%/90,000
=$21.93 per unit
Please help me the answer of Req 5, thank you very much! 1 Week 11 Problems...
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