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The Anderson Company has a maximum production capacity of 45,000 units per year. For that capacity level, fixed costs are $330,000 per year. Variable
The Anderson Company has a maximum production capacity of 45,000 units per year. For that capacity level, fixed costs are $330,000 per year. Variable costs per unit are $40. In the coming year, the company has orders for 49,000 units at $65. The company wants to make a minimum overall operating income of $190,000 on these 49,000 units. Requirement What maximum unit purchase price would Anderson Company be willing to pay to a subcontractor for the additional 4,000 units it cannot manufacture itself to earn an operating income of $190,000? Determine the maxiumum total cost to Anderson Company of producing the 49,000 units while earning an operating income of $190,000. Total costs to produce 49,000 units is
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