Question
The following annual per unit cost data at an activity level of 10,000 units has been provided below. the company produces and sells only one
The following annual per unit cost data at an activity level of 10,000 units has been provided below. the company produces and sells only one product.
($ per unit) sales 150.00 direct labor 15.00 direct material 18.00 variable manufacturing overhead 7.50 fixed manufacturing overhead 50.00 variable selling expense 1.50 fixed selling expenses 40.00 fixed administrative expenses 15.00
the relevant range is 8,000-13,000 at the current level of activity, calculate the following:
total sales revenue: total contribution margin: total fixed expenses:
the company is considering a price reduction approach to increase net income. the company believes that a 7% reduction in sales price will increase volume by 15%. simultaneously there will be a change in suppliers for direct material that will result in lowering direct materials costs by 10%. calculate the following: total sales revenue: total contribution margin: total fixed expenses:
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