When studying a project, the following variable costs were estimated for a normal production capacity of 140,000 units, with a maximum capacity of 200,000 units: Materials $120,000 Labor $300,000 Other $80,000 Fixed costs are estimated, according to the level of production, in: Production Fixed Cost 0 - 40,000 $320,000 40,001 - 130,000 $380,000 130,001 - 180,000 $420,000 180,001 - 200,000 $500,000 If the selling price of each unit is $15 and the expected production is 100,000 units per year, what is the minimum number of additional units that need to be sold at the price of $11 per unit to show a profit of $762,000 per year? To raise sales to 120,000 units per year, how much could be spent additionally in advertising (fixed cost) so that by maintaining a price of $15, a profit of 20% on sales?

When studying a project, the following variable costs were estimated for a normal production capacity of 140,000 units, with a maximum capacity of 200,000 units: Materials $120,000 Labor $300,000 Other $80,000 Fixed costs are estimated, according to the level of production, in: Production Fixed Cost 0 - 40,000 $320,000 40,001 - 130,000 $380,000 130,001 - 180,000 $420,000 180,001 - 200,000 $500,000 If the selling price of each unit is $15 and the expected production is 100,000 units per year, what is the minimum number of additional units that need to be sold at the price of $11 per unit to show a profit of $762,000 per year? To raise sales to 120,000 units per year, how much could be spent additionally in advertising (fixed cost) so that by maintaining a price of $15, a profit of 20% on sales?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter5: Activity-based Costing And Management

Section: Chapter Questions

Problem 9MCQ: Assume that the moving activity has an expected cost of 80,000. Expected direct labor hours are...

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