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Gene Company expects to operate at 90% of productive capacity. Total manufacturing costs for the production of 10,000 batteries are budgeted as follows: Gene Company
Gene Company expects to operate at 90% of productive capacity. Total manufacturing costs for the production of 10,000 batteries are budgeted as follows: Gene Company normally sells its GeneUS brand battery for exist4 each. It has the opportunity to sell an additional 1,000 generic-labeled batteries for exist2.50 each. The additional sales will not interfere with normal production or increase selling or administrative expenses. In a decision matrix for differential analysis, differential income or (loss) will be equal to (exist400 selling price - exist2.50 variable cost) times 1,000 units (exist2 50 selling price - exist2 60 total cost) times 1,000 units (exist2.50 selling price - exist2 40 variable cost) times 1 000 units (exist4 00 selling price - exist2 60 total cost) 1000 units
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