Question
The Company has a maximum production capacity of 55000 units per year. For that capacity level, fixed costs are 350000 per year. Variable costs 70
The Company has a maximum production capacity of 55000 units per year. For that capacity level, fixed costs are 350000 per year. Variable costs 70 per unit are . In the coming year, the company has orders for 60500 units at 95$ . The company wants to make a minimum overall operating income of 160000 on these 60500 units. Requirement What maximum unit purchase price would Company be willing to pay to a subcontractor for the additional 5500 units it cannot manufacture itself to earn an operating income of 160000 ? Determine the maxiumum total cost to Company of producing the 60500 units while earning an operating income of 160000. Total costs to produce 60,500 units is
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