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The Braxton Company has a maximum production capacity of 50,000 units per year. For that capacity level, fixed costs are $360,000 per year. Variable costs
The Braxton Company has a maximum production capacity of 50,000 units per year. For that capacity level, fixed costs are $360,000 per year. Variable costs per unit are $40. In the coming year, the company has orders for 55,500 units at $70. The company wants to make a minimum overall operating income of $ 155,000 on these 55,500 units. Requirement What maximum unit purchase price would Braxton Company be willing to pay to a subcontractor for the additional 5,500 units it cannot manufacture itself to earn an operating income of $155,000? Determine the maxiumum total cost to Braxton Company of producing the 55,500 units while earning an operating income of $155,000. Total costs to produce 55,500 units is 6090000
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