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PlayTime, Inc., is a leading manufacturer of sporting equipment. The company is in the process of evaluating the best use of its Plastics Division, which
PlayTime, Inc., is a leading manufacturer of sporting equipment. The company is in the process of evaluating the best use of its Plastics Division, which is currently manufacturing molded fishing tackle boxes. The company manufactures and sells 8,000 tackle boxes annually, making full use of its available capacity. The selling prices and costs of the tackle boxes are as follows Selling price per box 86$ | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Costs per box | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Direct materials | $17.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Direct labor | 18.75 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable manufacturing overhead | 7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed manufacturing overhead * | 6.25 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable selling & administrative** | 10 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed selling & administrative* | 7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total cost per box 66$ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Profit per box | $20.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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