The Gregoire Company has a maximum production capacity of 35,000 units per year. For that capacity level, fixed costs are $340,000 per year. Variable costs per unit are $65. In the coming year, the company has orders for 40,500 units at $95. The company wants to make a minimum overall operating income of $155,000 on these 40,500 units. Requirement What maximum unit purchase price would Gregoire Company be willing to pay to a subcontractor for the additional 5,500 units it cannot manufacture itself to earn an operating income of $155,000? IEE Determine the maxiumum total cost to Gregoire Company of producing the 40,500 units while earning an operating income of $155,000. Total costs to produce 40,500 units is $ 3,692,500 Identify the total cost to Gregoire Company to manufacture 35,000 units. Total costs to manufacture 35,000 units
The Gregoire Company has a maximum production capacity of 35,000 units per year. For that capacity level, fixed costs are $340,000 per year. Variable costs per unit are $65. In the coming year, the company has orders for 40,500 units at $95. The company wants to make a minimum overall operating income of $155,000 on these 40,500 units. Requirement What maximum unit purchase price would Gregoire Company be willing to pay to a subcontractor for the additional 5,500 units it cannot manufacture itself to earn an operating income of $155,000? IEE Determine the maxiumum total cost to Gregoire Company of producing the 40,500 units while earning an operating income of $155,000. Total costs to produce 40,500 units is $ 3,692,500 Identify the total cost to Gregoire Company to manufacture 35,000 units. Total costs to manufacture 35,000 units
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The Gregoire Company has a maximum production capacity of 35,000 units per year. For that capacity level, fixed costs are $340,000 per year. Variable costs per unit are $65. In the coming year,
the company has orders for 40,500 units at $95. The company wants to make a minimum overall operating income of $155,000 on these 40,500 units.
Requirement
What maximum unit purchase price would Gregoire Company be willing to pay to a subcontractor for the additional 5,500 units it cannot manufacture itself to earn an operating income of
$155,000?
Determine the maxiumum total cost to Gregoire Company of producing the 40,500 units while earning an operating income of $155,000.
Total costs to produce 40,500 units is $
3,692,500
Identify the total cost to Gregoire Company to manufacture 35,000 units.
Total costs to manufacture 35,000 units
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