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Caribbean Gators Limited is a newly organized footwear manufacturing business that plans to manufacture and sell 40,000 units per year of a unique comfort footwear called "Gators" to compete with the famous Crocs brand. The following estimates have been made of the company's costs and expenses. Manufacturing costs Direct materials Direct labor Manufacturing overhead Period costs Seting expenses Administrative expenses Totals Fixed $200,000 $600.000 Variable per Unit $30 28 17

Caribbean Gators Limited is a newly organized footwear manufacturing business that plans to manufacture and sell 40,000 units per year of a unique comfort footwear called "Gators" to compete with the famous Crocs brand. The following estimates have been made of the company's costs and expenses. Manufacturing costs Direct materials Direct labor Manufacturing overhead Period costs Seting expenses Administrative expenses Totals Fixed $200,000 $600.000 Variable per Unit $30 28 17

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Caribbean Gators Limited is a newly organized footwear manufacturing business that plans to manufacture and sell 40,000 units per year of a unique comfort footwear called "Gators" to compete with the famous Crocs brand. The following estimates have been made of the company's costs and expenses. Manufacturing costs Direct materials Direct labor Manufacturing overhead Period costs Selling expenses Administrative expenses Totals Fixed $200,000 400.000 $600,000 Variable per Unit $30 28 Instructions: a. What should the company establish as the sales price per unit if it sets a target of earning an operating income of $200,000 by producing and selling 40,000 units during the first year of operations? / c. What will be the margin of safety (in dollars) if the company produces and sells 40,000 units at the sales price computed in parta? /
Transcribed Image Text:Caribbean Gators Limited is a newly organized footwear manufacturing business that plans to manufacture and sell 40,000 units per year of a unique comfort footwear called "Gators" to compete with the famous Crocs brand. The following estimates have been made of the company's costs and expenses. Manufacturing costs Direct materials Direct labor Manufacturing overhead Period costs Selling expenses Administrative expenses Totals Fixed $200,000 400.000 $600,000 Variable per Unit $30 28 Instructions: a. What should the company establish as the sales price per unit if it sets a target of earning an operating income of $200,000 by producing and selling 40,000 units during the first year of operations? / c. What will be the margin of safety (in dollars) if the company produces and sells 40,000 units at the sales price computed in parta? /
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