Question
(3) The Big Bag Company produces its famous bag that sells for $50 per unit. Operating information for 2020 is as follows: Units Sold
(3) The Big Bag Company produces its famous bag that sells for $50 per unit. Operating information for 2020 is as follows: Units Sold Sales revenue 10,000 $500,000 Cost of goods sold Variable manufacturing costs $150,000 Fixed manufacturing costs $100,000 Marketing costs Variable Marketing costs $30,000 Fixed Marketing costs $60,000 Required: 1) Calculate contribution margin and operating income. 2) Calculate the breakeven point in units and the breakeven revenues. 3) Big Bag has just received a special one-time-only order for 1,000 bags at $30 per unit. Accepting the special order would not affect the company's regular business. Calculate the new contribution margin and operating income, if Big Bag accept this special order.
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