Question
1-A firm sells its product for $40 per unit. Its direct material costs are $7 per unit and direct labour costs are $5. Fixed manufacturing
1-A firm sells its product for $40 per unit. Its direct material costs are $7 per unit and direct labour costs are $5. Fixed manufacturing overhead costs are $82,500 and variable overhead costs are $6 per unit. Calculate the required sales in dollars to break even.
Required sales in dollars | $ |
2- Waterloo Co. sells product P-14 at a price of $46 a unit. The per-unit cost data are direct materials $15, direct labour $10, and overhead $12 (75% variable). Waterloo has no excess capacity to accept a special order for 35,000 units, at a discount of 25% from the regular price. Selling costs associated with this order would be $3 per unit. Indicate the net income (loss) that Waterloo would realize by accepting the special order. (Enter loss with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).)
Incremental income (loss) | $ | |
Waterloo Co. |
the special order.
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