Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Engler Corporation manufactures specialized blades. Last year the company manufactured and sold 25,000 blades. It can manufacture an additional 10,000 blades without adding new machinery

Engler Corporation manufactures specialized blades. Last year the company manufactured and sold 25,000 blades. It can manufacture an additional 10,000 blades without adding new machinery and equipment (i.e. fixed costs). Its total estimated cost for the 25,000 units it made last year are as follows:

Direct Material (variable)

$250,000

Direct labor (variable)

$375,000

Manufacturing Overhead

Variable portion

$62,500

Fixed portion

$55,000

Selling and Administrative

Variable portion

$50,000

Fixed portion

$35,000

What is the break-even price for the blades this year (given a production forecast of 30,000 blades)?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions