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6. Purex Company produces and sells a single product called Kleen. Annual production capacity is 100,000 machine hours. It takes one machine hour to produce
6. Purex Company produces and sells a single product called Kleen. Annual production capacity is 100,000 machine hours. It takes one machine hour to produce a unit of Kleen. Annual demand for Kleen is expected to remain at 80,000 units. The selling price is expected to remain at $10 per unit. Cost data for producing and selling Kleen are as follows: Variable costs per unit: Direct materials $1.50 Direct labor 2.50 Variable manufacturing support 0.80 Variable selling and distribution 2.00 Fixed costs per year
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