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Golden Rams Corporation manufactures thermostats for office buildings. The following is the cost of each unit: Materials. $36.00 Labor........ .... 14.00 Variable Overhead... ...4.00 Fixed

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Golden Rams Corporation manufactures thermostats for office buildings. The following is the cost of each unit: Materials. $36.00 Labor........ .... 14.00 Variable Overhead... ...4.00 Fixed Overhead ($1,800,000 per year, 100,000 units per year)..18.00 Total. .... $72.00 ASU Company has approached Golden Rams with an offer to buy 7,500 thermostats at a price of $60 each. The regular selling price is $100. Golden Rams has the capacity to produce the 7.500 additional units without affecting the current production of 100,000 units. ASU requires that each unit use its branding, which requires a more expensive label, resulting in an additional $2 per unit material cost. The labor cost of affixing the label will be the same as for the current models. ASU'S order will also require a one-time rental of packing equipment for $20,000. 1. What is the sales revenue at 100,000 units and at 107,500 units? ASU Company has approached Golden Rams with an offer to buy 7,500 thermostats at a price of $60 each. The regular selling price is $100. Golden Rams has the capacity to produce the 7,500 additional units without affecting the current production of 100,000 units. ASU requires that each unit use its branding, which requires a more expensive label, resulting in an additional $2 per unit material cost. The labor cost of affixing the label will be the same as for the current models. ASU's order will also require a one-time rental of packing equipment for $20,000. 1. What is the sales revenue at 100, 000 units and at 107,500 units? 2. What is the total variable cost at 100,000 units and at 107,500 units? 3. What is the contribution margin at 100,000 units and at 107,500 units? 4. What is the operating profit at 100,000 units and at 107,500 units? 5. Would you recommend that Golden Rams Corporation accept the order

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