Orion Inc., is a newly organized manufacturing business that plans to manufacture and sell 30,000 units per year of a new product. The following estimates have been made of the company's costs and expenses (other than income taxes): Variable per Unit Fixed Manutacturing costs: Direct materials.. Direct labor.. Manufacturing overhead....$440,000 $ 38 ...... 47 Period costs: Selling expenses... Administrative expenses.. 360,000 $800,000 $100 Totals. What should the company establish as the sales price per unit if it sets a target of earning an operating income of $400,000 by producing and selling 30,000 units during the first year of operations? (Hint: First compute the required contribution margin per unit. . At the unit sales price computed in part a, how many units must the company produce and sell to break even? (ASsume all units produced are sold.) (
Orion Inc., is a newly organized manufacturing business that plans to manufacture and sell 30,000 units per year of a new product. The following estimates have been made of the company's costs and expenses (other than income taxes): Variable per Unit Fixed Manutacturing costs: Direct materials.. Direct labor.. Manufacturing overhead....$440,000 $ 38 ...... 47 Period costs: Selling expenses... Administrative expenses.. 360,000 $800,000 $100 Totals. What should the company establish as the sales price per unit if it sets a target of earning an operating income of $400,000 by producing and selling 30,000 units during the first year of operations? (Hint: First compute the required contribution margin per unit. . At the unit sales price computed in part a, how many units must the company produce and sell to break even? (ASsume all units produced are sold.) (
Chapter5: Process Costing
Section: Chapter Questions
Problem 1PB: The following product costs are available for Stellis Company on the production of erasers: direct...
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