Cairney, Incorporated manufactures a specialized part used in internal combustion engines. The annual demand for the part is 249,000 units. The facility has a practical capacity of 264,000 units annually. The company leased the current facility because facilities capable of manufacturing the unit require machines that can produce 66,000 units each. The annual cost of the facility is $1,013,760. The variable cost of a part is $4. Required: What cost per unit should the cost system report to facilitate management decision making? Note: Round your answer to 2 decimal places. What is the cost of excess capacity? cost per unit cost of excess capacity

Cairney, Incorporated manufactures a specialized part used in internal combustion engines. The annual demand for the part is 249,000 units. The facility has a practical capacity of 264,000 units annually. The company leased the current facility because facilities capable of manufacturing the unit require machines that can produce 66,000 units each. The annual cost of the facility is $1,013,760. The variable cost of a part is $4. Required: What cost per unit should the cost system report to facilitate management decision making? Note: Round your answer to 2 decimal places. What is the cost of excess capacity? cost per unit cost of excess capacity

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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Required:

What cost per unit should the cost system report to facilitate management decision making?
Note: Round your answer to 2 decimal places.
What is the cost of excess capacity?

cost per unit

cost of excess capacity

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