Orion Inc., is a newly organized manufacturing business that plans to manufacture and sell 30,000 units per year of a new product. The following estimates have been made of the company's costs and expenses (other than income taxes): Variable Fixed per Unit Manufacturing costs: Direct materials.. Direct labor ... Manufacturing overhead ..$440,000 $ 38 47 Period costs: Selling expenses.. Administrative expenses. 360,000 $800,000 $100 Totals .. Instructions a. What should the company establish as the sales price per unit if it sets a target of earning an operating income of $400,000 by producing and selling 30,000 units during the firet vear of operations? (Hint: First compute the required contribution margin per unit.) b. At the unit sales price computed in part a, how many units must the company produce and sell to break even? (Assume all units produced are sold.)

Orion Inc., is a newly organized manufacturing business that plans to manufacture and sell 30,000 units per year of a new product. The following estimates have been made of the company's costs and expenses (other than income taxes): Variable Fixed per Unit Manufacturing costs: Direct materials.. Direct labor ... Manufacturing overhead ..$440,000 $ 38 47 Period costs: Selling expenses.. Administrative expenses. 360,000 $800,000 $100 Totals .. Instructions a. What should the company establish as the sales price per unit if it sets a target of earning an operating income of $400,000 by producing and selling 30,000 units during the firet vear of operations? (Hint: First compute the required contribution margin per unit.) b. At the unit sales price computed in part a, how many units must the company produce and sell to break even? (Assume all units produced are sold.)

Name: Orion Inc., is a newly organized manufacturing business that plans to
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Description: Orion Inc., is a newly organized manufacturing business that plans to manufacture and sell 30,000units per year of a new product. The following estimates have been made of the company's costs andexpenses (other than income taxes):Variableper UnitFix

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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