Chapter 3, Problem 4E

If annual demand is 60,000 units, the ordering cost is $30 per order, and the holding cost is $6 per unit per year, what is the optimal order quantity using the fixed-order quantity model?

correct answer

During its first year, Maple Corp. showed a $20 per-unit profit under absorption costing but would have reported a total profit of $18,000 less under variable costing. Suppose production exceeded sales by 600 units and an average contribution margin of 60% was maintained. a. What is the fixed cost per unit? b. What is the sales price per unit? c. What is the variable cost per unit? d. What is the unit sales volume if total profit under absorption costing was $220,000?