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Homework: Chapter Three-SP 21 Score: 0 of 1 pt 1 of 5 (0 complete) HW Score: 0 E3-22 (similar to) Question H Knight Manufacturing sold
Homework: Chapter Three-SP 21 Score: 0 of 1 pt 1 of 5 (0 complete) HW Score: 0 E3-22 (similar to) Question H Knight Manufacturing sold 430.000 units of its product for $72 per unit in 2020. Variable cost per unit is $60, and total fixed costs are $1,720.000 Read the requirements Requirement 1. Calculate (a) contribution margin and (b) operating income. (a) Determine the formula used to calculate the contribution margin. Contribution margin Requirements - X 1. Calculate (a) contribution margin and (b) operating income 2. Knight's current manufacturing process is labor intensive. Kate Wolf, Knight's production manager, has proposed investing in state-of-the-art manufacturing equipment, which will increase the annual foced costs to $5,590,000. The variable costs are expected to decrease to $44 per unit. Knight expects to maintain the same sales volume and selling price next year. How would acceptance of Wolf's proposal affect your answers to (a) and (b) in requirement 1? 3. Should Knight's executives accept Wolf's proposal? Explain Print Done
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