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The Shoebottom Company has a maximum production capacity of 60,000 units per year. For that capacity level, fixed costs are $330,000 per year. Variable costs
The Shoebottom Company has a maximum production capacity of 60,000 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 65,000 units at $60. The company wants to make a minimum overall operating income of $185,000 on these 65,000 units. Requirement What maximum unit purchase price would Shoebottom Company be willing to pay to a subcontractor for the additional 5,000 units it cannot manufacture itself to earn an operating income of $185,000 ? Determine the maxiumum total cost to Shoebottom Company of producing the 65,000 units while earning an operating income of $185,000. Total costs to produce 65,000 units is Identify the total cost to Shoebottom Company to manufacture 60,000 units. Total costs to manufacture 60,000 units Determine the maxiumum additional costs to purchase 5,000 units from a subcontractor that Shoebottom Company would pay in order to earn an operating income of $185,000. The additional costs to purchase 5,000 units from a subcontractor is What maximum unit purchase price would Shoebottom Company be willing to pay to a subcontractor for the additional 5,000 units it cannot manufacture itself to earn an operating income of $185,000 ? (Round your answer to the nearest cent.) The maximum price per unit that can be paid to a subcontractor is
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