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Kitchen Helper Inc (KHI) is the manufacturer of toaster ovens To improve controls over operations pnice KHI anticipates sales of 90,000 units. The vice-president of
Kitchen Helper Inc (KHI) is the manufacturer of toaster ovens To improve controls over operations pnice KHI anticipates sales of 90,000 units. The vice-president of sales strongly fells that reducing the price to $13 per unit will increase sales to 100,000. Based on past experience, the cost to produce 90,000 units are as follows Variable Cost Manufacturing Administrative Selling $6.00 per unit $3 00 per unit $1.00 per unit Fixed Costs Manufacturing Administrative $150,000.00 $80,000.00 The increase in production from 90,000 units to 100,000 units will result in an increase of Fixed Manufacturing cost to $175,000.00 Complete the following Comparative fiex budget for KHI for 2017 Kitchen Helper Inc Comparative Flex Budget-Toaster Ovens For the year ending 2017 Level Level Sales units 90,000 100,000 300 o00 Sales $ Variable Costs 6 00,0o Manufacturing Administrative Selling -70/0OD 0,00 0 Total Variable Cost 50000 Contributed Margin CM % Fixed Costs Manufacturing Administrative 30 00 Tolal Fixed Net Income before Taxes N196 WHAT IS YOUR CONCLUSION
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