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INFO: Electra Manufacturing, Inc., produces metal control valves used in the production of oil eld equipment. The control valves are sold to various gas and
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Electra Manufacturing, Inc., produces metal control valves used in the production of oil eld equipment. The control valves are sold to various gas and oil engineering companies through out the United States. Projected sales in units for the coming four months are as follows: January 20000 control valves February 25000 control valves March 30000 control valves April 30000 control valves May 22000 control valves 23 24 25 26 21| 23 29 30 31 32 33 34 35 36 37 3a 39 4o 41 42 43 44 45 45 cl. Overhead each month is estimated as follows (variable costs are per unit produced): Supplies Power Maintenance Supervision Depreciation Taxes Other e. Monthly selling and administrative expenses are estimated as follows (variable costs are per unit sold): Salaries Commissions Depredaon Shipping Other Fixed Cost Compone Variable Cost Component 5 -- $1.00 .. 1.1 23,000 2.1 14,000 .. 100,000 7,000 -- 56,000 3.6 Fixed Cost Compons Variable Cost Component $30,000 $0.75 5,000 -- 10,000 0.4 f. The unit selling price of the control valve is $90. g. lnMarch, the company plans to purchase land for future expansion. The land costs $90,000Step by Step Solution
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