The salespeople at Ayayai, a notebook manufacturer, commonly pressured operations managers to keep costs down so the company could give bigger discounts to large customers. Kenneth, the operations supervisor, leaked the $1.20 total unit cost to salespeople, who were thrilled, since that was slightly lower than the previous year's unit cost. Budgets were not yet finalized for the upcoming year, so it was unclear what the target unit cost would be. Kenneth knew the current year's operating capacity was two million notebooks, and Ayayai produced and sold just that many. The detailed breakdown of the $1.20 total unit cost is as follows. Direct material Direct labor Variable overhead Fixed overhead Total cost per unit Total fixed costs $ Gross margin $0.10 $ 0.25 0.05 What were Ayayai's total fixed costs? If the average selling price was $1.95, how much gross margin did the company generate? 0.80 $1.20

The salespeople at Ayayai, a notebook manufacturer, commonly pressured operations managers to keep costs down so the company could give bigger discounts to large customers. Kenneth, the operations supervisor, leaked the $1.20 total unit cost to salespeople, who were thrilled, since that was slightly lower than the previous year's unit cost. Budgets were not yet finalized for the upcoming year, so it was unclear what the target unit cost would be. Kenneth knew the current year's operating capacity was two million notebooks, and Ayayai produced and sold just that many. The detailed breakdown of the $1.20 total unit cost is as follows. Direct material Direct labor Variable overhead Fixed overhead Total cost per unit Total fixed costs $ Gross margin $0.10 $ 0.25 0.05 What were Ayayai's total fixed costs? If the average selling price was $1.95, how much gross margin did the company generate? 0.80 $1.20

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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