NUBD Manufacturing is considering dropping a product line. It currently produces a multipurpose woodworking clamp in a simple manufacturing process that uses special equipment. Variable costs amount to P6.00 per unit. Fixed factory overhead costs, exclusive c depreciation, have been allocated to this product at a rate of P3.50 a unit and will continue whether or not production ceases. Depreciation on the special equipment amounts to P20,000 a year. If production of the clamp is stopped, the special equipment can be sold for P30,000; if production continues, however, the equipment will be useless for further production at the end of one year and will have no salvage value. The clamp has a unit sales price of P10. Ignoring income tax effects, the minimum number of units that would have to b sold in the current year to make it worthwhile to keep the equipment (on a cash-flow basis) is Do not use money sign. Sample format: 1,111
NUBD Manufacturing is considering dropping a product line. It currently produces a multipurpose woodworking clamp in a simple manufacturing process that uses special equipment. Variable costs amount to P6.00 per unit. Fixed factory overhead costs, exclusive c depreciation, have been allocated to this product at a rate of P3.50 a unit and will continue whether or not production ceases. Depreciation on the special equipment amounts to P20,000 a year. If production of the clamp is stopped, the special equipment can be sold for P30,000; if production continues, however, the equipment will be useless for further production at the end of one year and will have no salvage value. The clamp has a unit sales price of P10. Ignoring income tax effects, the minimum number of units that would have to b sold in the current year to make it worthwhile to keep the equipment (on a cash-flow basis) is Do not use money sign. Sample format: 1,111
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 3CMA: Aril Industries is a multiproduct company that currently manufactures 30,000 units of Part 730 each...
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