Barker Company has a single product called a Zet. The company normally produces and sells 89,000 Zets each year at a selling price of $48 per unit. The company's unit costs at this level of activity are given below: Direct materials $ 7.50 Direct labor 8.00 Variable manufacturing overhead 3.80 Fixed manufacturing overhead 8.00 ($712,000 total) Variable selling expenses 3.70 Fixed selling expenses 4.50 ($400,500 total) Total cost per unit $ 35.50 A number of questions relating to the production and sale of Zets are given below. Each question is independent. Required: 1. Assume that Barker Company has sufficient capacity to produce 115,700 Zets each year without any increase in fixed manufacturing overhead costs. The company could increase sales by 30% above the present 89,000 units each year if it were willing to increase the fixed selling expenses by $120,000.
Assume that Barker Company has sufficient capacity to produce 115,700 Zets each year without any increase in fixed manufacturing overhead costs. The company could increase sales by 30% above the present 89,000 units each year if it were willing to increase the fixed selling expenses by $120,000.
A .Calculate the incremental net operating income.
Fill in the Blank:
Increased Sales in units:
Contribution Margin per unit:
Incremental Contribution margin:
Minus: added fixed selling expense:
incremental net operating income:
Assume again that Barker Company has sufficient capacity to produce 115,700 Zets each year. The company has an opportunity to sell 26,700 units in an overseas market. Import duties, foreign permits, and other special costs associated with the order would total $18,690. The only selling costs that would be associated with the order would be $1.70 per unit shipping cost. Compute the per unit break-even price on this order. (Round your answers to 2 decimal places.)
Fill in the blank
Variable Manafacturing overhead per unit:
Import duties, etc.:
Shipping cost per unit:
Break-even price per unit: