Read the scenario below and type your SOLUTIONS and answer for each question in MS word.

Emporia Hornets Company manufactures and sells one product for $34 per unit.

The company maintains no beginning or ending inventories and its relevant range of production is 20,000 units to 30,000 units.

When Emporia Hornets produces and sells 25,000 units, its unit costs are as shown in the table below: (Hint 1: within the relevant range, variable and fixed costs behave consistently.

For example, a unit variable cost would be constant but a total variable cost would vary, and a unit fixed cost would vary but a total fixed cost would be constant.

Hint 2: Each of the unit fixed costs in the table below are the average fixed manufacturing costs per unit when the production level is at 25,000 units.

An average fixed cost per unit is the total fixed cost divided by the total number of units produced. You will need to compute a total fixed cost for each fixed cost item first and then to calculate a total fixed manufacturing cost, a total fixed period cost, or both.)

	Amount Per Unit
Direct materials	$ 8.00
Direct labor	$ 5.00
Variable manufacturing overhead	$ 1.00
Fixed manufacturing overhead	$ 6.00
Fixed selling expense	$ 3.50
Fixed administrative expense	$ 2.50
Sales commissions	$ 4.00
Variable administrative expense	$ 1.00

Required:

For financial accounting purposes, (1) what is the total amount of product costs incurred to make 25,000 units? (1.5pts)

What is Emporia's (1) contribution margin per unit and (2) ratio? (Round Contribution margin per unit to second decimal places and "Contribution margin ratio" to first decimal place) (2.5pts)

What is Emporia's (1) break-even point (1) in unit sales and (2) in dollar sales? (Round to second decimal places) (2.5pts)

How much will Emporia's net operating income increase if it can grow production and sales from 25,000 units to 26,500 units? (1.5pts)