Lancer Audio produces a high-end DVD player that sells for $1,300. Total operating expenses for July were

Question:

Lancer Audio produces a high-end DVD player that sells for $1,300. Total operating expenses for July were as follows:
Units produced and sold 150
Component costs .....................................................$ 71,000
Supplies ...................................................................2,500
Assembly labor .........................................................25,000
Rent ........................................................................2,300
Supervisor salary .........................................................5,600
Electricity .......................................................................350
Telephone .......................................................................280
Gas .................................................................................300
Shipping ......................................................................2,000
Advertising .................................................................2,600
Administrative costs ...................................................15,000
Total ...................................................................$126,930
Required
a. Use account analysis to determine fixed cost per month and variable cost per DVD player. Assume assembly labor in a variable cost.
b. Project total cost for August, assuming production and sales of 175 units.
c. What is the per DVD player?
d. Estimate total profit, assuming production and sales of 175 units.
e. Lancer Audio is considering an order for 120 DVD players, to be produced in the next 10 months, from a customer in Canada. The selling price will be $1,050 per unit (well under the normal selling price). However, the Lancer Audio brand name will not be attached to the product. What will be the impact on company profit associated with this order?
Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...