EBK CORNERSTONES OF COST MANAGEMENT
3rd Edition
ISBN: 8220100474972
Author: MOWEN
Publisher: CENGAGE L
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Chapter 3, Problem 26E
Starling Co. manufactures one product with a selling price of $18 and variable cost of $12. Starling’s total annual fixed costs are $38,400. If operating income last year was $28,800, what was the number of units Starling sold?
- a. 4,800
- b. 6,400
- c. 5,600
- d. 11,200
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Rocky River Fast Lube does oil changes on vehicles in 15 minutes or less. The variable cost associated with each oil change is $12 (oil, filter, and 15 minutes of employee time). The fixed costs of running the shop are $8,000 each month (store manager salary, depreciation on shop and equipment, insurance, and property taxes). The shop has the capacity to perform 4,000 oil changes each month.
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Part 1
A.
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Chapter 3 Solutions
EBK CORNERSTONES OF COST MANAGEMENT
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