Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Masked Productions was established two years ago to produce N95 facemasks. Production capacity is 55,000 facemasks, although the company is still trying to build its

image text in transcribed

Masked Productions was established two years ago to produce N95 facemasks. Production capacity is 55,000 facemasks, although the company is still trying to build its client base and is currently operating at 60 per cent capacity. Fixed production costs are $295,000 and variable production costs are $9 per unit. Facemasks are generally sold through Pharmacy franchises at price of 25 each. Masked Productions has received an offer from ACT Health to purchase a one-off order of 25,000masks for $17 per unit. The ACT Health order will require additional delivery costs of $4 per mask. Required: (Round your answers to whole dollars). What is the current contribution margin for Masked Productions? $ 1. 2. What would be the contribution margin for the special order? 3. If Masked Productions wanted to maximise profits for the current year, how many facemasks will be sold to ACT Health? facemasks. How much profit would these sales contribute to the bottom line? $ profit. (Note if the special order should not proceed, enter o for both answers)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Costing

Authors: Lucey

7th Edition

1844809439, 978-1844809431

More Books

Students also viewed these Accounting questions

Question

=+Could you use an ambient ad?

Answered: 1 week ago