Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Expected increase in revenue- 5,000X 45,000 Expected increase in variable costs-5,000x8.50= 2,500 Try it! ) Thomas Company makes a product that regularly sells for $12.50
Expected increase in revenue- 5,000X 45,000 Expected increase in variable costs-5,000x8.50= 2,500 Try it! ) Thomas Company makes a product that regularly sells for $12.50 per unit. The product has variable manufacturing costs of $8.50 per unit and fixed manufacturog costs of $2.00 per unit based on $200,000 total fixed costs at current production of 100.000 units). Therefore, the total production cost is $10.50 per unit. Thomas Company receives an otter from a company to purchase 5.000 units for $9.00 each selling and administrative costs and t irure sales will not be affected by the sale and Thomas does not expect any additional fixed costs 7. If Thomas Company has excess capacity, should it accept the offer from Wesley? Show your calculations. 8. Does your answer change if Thomas Company is operating at capacity? Why or why not? 45,000-42,500=2,500 Im Thing
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started