The cost to manufacture an unfinished unit is $120 ($90 variable, $30 fixed). The selling price per unit is $150. The company has the unused productive capacity and has determined that units could be finished and sold for $195 with an increase in variable costs of 40%. What is the additional net income per unit to be gained by finishing the unit? a. $9. b. $30. c. $45. d. $36.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter14: Capital Structure Management In Practice
Section14.A: Breakeven Analysis
Problem 7P
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The cost to manufacture an unfinished unit is
$120 ($90 variable, $30 fixed). The selling price
per unit is $150. The company has the unused
productive capacity and has determined that
units could be finished and sold for $195 with
an increase in variable costs of 40%.
What is the additional net income per unit to be
gained by finishing the unit?
a. $9.
b. $30.
c. $45.
d. $36.
Transcribed Image Text:The cost to manufacture an unfinished unit is $120 ($90 variable, $30 fixed). The selling price per unit is $150. The company has the unused productive capacity and has determined that units could be finished and sold for $195 with an increase in variable costs of 40%. What is the additional net income per unit to be gained by finishing the unit? a. $9. b. $30. c. $45. d. $36.
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