Who then customize and distribute the products to quality

Question

Please read the case study given below and answer questions given.

Case Study Electron Control, Inc., sells voltage regulators to other manufacturers, who then customize and distribute the products to quality assurance labs for their sensitive test equipment. The yearly volume of output is 15,000 units. The selling price and cost per unit are shown below:

Selling price		$200
Costs:
Direct material	$35
Direct labor	50
Variable overhead	25
Variable selling expenses	25
Fixed selling expenses	15	150
Unit profit before tax		$ 50

Management is evaluating the alternative of performing the necessary customizing to allow Electron Control to sell its output directly to Q/A labs for $275 per unit. Although no added investment is required in productive facilities, additional processing costs are estimated as:

Direct labor	$25 per unit
Variable overhead	$15 per unit
Variable selling expenses	$10 per unit
Fixed selling expenses	$100,000 per year

Answer 1

Consider the case study illustrated in the assignment and on the basis of the information and tables provided, answer the following questions. Case Study Electron Control, Inc., sells voltage regulators to the other manufacturers, who then modify and deal out the products to quality assurance labs for their responsive test equipment. The annual volume of output is around 15,000 units. The selling price and cost per unit are illustrated in the problem: Management is assessing the alternative of performing the essential customizing to let Electron Control to sell its output directly to Q/A labs for $275 per unit. However no added investment is requisite in productive facilities, extra processing costs are estimated as: