Question
1 -The Manassas Company has 55 obsolete keyboards that are carried in inventory at a cost of $9,600. If these keyboards are upgraded at a
1 -The Manassas Company has 55 obsolete keyboards that are carried in inventory at a cost of $9,600. If these keyboards are upgraded at a cost of $7,400, they could be sold for $19,000. Alternatively, the keyboards could be sold as is for $8,500. What is the net advantage or disadvantage of re-working the keyboards?
2-A company has $7.40 per unit in variable costs and $3.60 per unit in fixed costs at a volume of 50,000 units. If the company marks up total cost by 0.41, what price should be charged if 58,000 units are expected to be sold?
3 -The Estrada Company uses cost-plus pricing with a 0.35 mark-up. The company is currently selling 100,000 units. Each unit has a variable cost of $4.10. In addition, the company incurs $182,300 in fixed costs annually. If demand falls to 75,100 units and the company wants to continue to earn a 0.35 return, what price should the company charge?
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