Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
Gene Company expects to operate at 90% of productive capacity. Total manufacturing costs for the production of 10,000 batteries are budgeted as follows: Direct materials
Gene Company expects to operate at 90% of productive capacity. Total manufacturing costs for the production of 10,000 batteries are budgeted as follows: Direct materials $1.00 per unit $1.00 per $10,000 unit .80 per unit 8.000 Direct labor $.80 per unit Variable factory overhead $.60 per unit Total fixed factory overhead .60 per unit 6.000 2,000 Total manufacturing costs $ 26,000 Gene Company normally sells its GeneUS brand battery for $4 each. It has the opportunity to sell an additional 1.000 generic-labeled batteries for $2.50 each. The additional sales will not interfere with normal production or increase selling or administrative expenses. Gene Company should take the offer and make a differential ome of $100 o take the offer and make a differential income of $1,400 O reject the offer and avoid a differential loss of ($100) reject the offer and avoid a differential loss of ($1,500)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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