Question by Molly Sue: Andretti Company has a single product called a Dak. The company normally produces and sells 96,000 Daks each y?
Andretti Company has a single product called a Dak. The company normally produces and sells 96,000 Daks each year at a selling price of $ 49 per unit. The company’s unit costs at this level of activity are given below:
Direct materials$ 9.40
Direct labor8.00
Variable manufacturing overhead3.40
Fixed manufacturing overhead7.00 ($ 672,000 total)
Variable selling expenses2.00
Fixed selling expenses6.00 ($ 576,000 total)
Total cost per unit$ 35.80
________________________________________
A number of questions relating to the production and sale of Daks follow. Each question is independent.
Requirement 1:
(a)Assume that Andretti Company has sufficient capacity to produce 124,800 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its sales by 30% above the present 96,000 units each year if it were willing to increase the fixed selling expenses by $ 127,000. Compute the Incremental net operating income.
Best answer:
Answer by Record three vio Suspension
Oh my Jesus! Dont say things like that!
Know better? Leave your own answer in the comments!