Business, 10.01.2020 02:31, Jakyramason
Cobb company currently produces and sells 9,000 units annually of a product that has a variable cost of $20 per unit and annual fixed costs of $195,000. the company currently earns a $228,000 annual profit. assume that cobb has the opportunity to invest in new labor-saving production equipment that will enable the company to reduce variable costs to $16 per unit. the investment would cause fixed costs to increase by $25,000 because of additional depreciation cost.
use the equation method to determine the sales price per unit under existing conditions (current equipment is used).
prepare a contribution margin income statement, assuming that cobb invests in the new production equipment.
Answers: 3
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Cobb company currently produces and sells 9,000 units annually of a product that has a variable cost...
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