K Fancy Pasty Puffs is considering building a new plant in Europe. It predicts sales at the new plant to be 37,000 units at $5/unit. Below is a listing of estimated expenses % of Annual Expense Category Materials Labor Overhead Marketing/Admin Total Annual Expenses $15,000 $20,000 $50,000 $30,000 that are Fixed 10% 20% 50% 70% A European firm was contracted to sell the product and will receive a commission of 15% of the sales price. No US home office expenses will be allocated to the new facility The unit variable cost for the company is OA. $2.47 OB. $3.11 OC. $1.72 OD. $1.39 4
K Fancy Pasty Puffs is considering building a new plant in Europe. It predicts sales at the new plant to be 37,000 units at $5/unit. Below is a listing of estimated expenses % of Annual Expense Category Materials Labor Overhead Marketing/Admin Total Annual Expenses $15,000 $20,000 $50,000 $30,000 that are Fixed 10% 20% 50% 70% A European firm was contracted to sell the product and will receive a commission of 15% of the sales price. No US home office expenses will be allocated to the new facility The unit variable cost for the company is OA. $2.47 OB. $3.11 OC. $1.72 OD. $1.39 4
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:K
Fancy Pasty Puffs is considering building a new plant in Europe. It predicts sales at the new plant to be 37,000 units at $5/unit. Below is a listing of estimated expenses
% of Annual Expense
Category
Materials
Labor
Overhead
Marketing/Admin
Total Annual Expenses
$15,000
$20,000
$50,000
$30,000
that are Fixed
10%
20%
50%
70%
A European firm was contracted to sell the product and will receive a commission of 15% of the sales price. No US home office expenses will be allocated to the new facility
The unit variable cost for the company is
OA. $2.47
OB. $3.11
OC. $1.72
OD. $1.39
4
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