Regal Manufacturing produces an unfinished product at a cost of $135 per unit ($100 variable costs, $35 fixed costs). The selling price of the unfinished unit is $170. The company has excess capacity and can finish the unit to sell for $220, but doing so will increase variable costs by 50%. What is the additional net income per unit to be gained by finishing the unit? a. $12 b. $40 c. $45 d. $35
Regal Manufacturing produces an unfinished product at a cost of $135 per unit ($100 variable costs, $35 fixed costs). The selling price of the unfinished unit is $170. The company has excess capacity and can finish the unit to sell for $220, but doing so will increase variable costs by 50%. What is the additional net income per unit to be gained by finishing the unit? a. $12 b. $40 c. $45 d. $35
Chapter14: Capital Structure Management In Practice
Section14.A: Breakeven Analysis
Problem 7P
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