Anderson produces color cartridges for inkjet printers. Suppose cartridges are sold to mail-order distributors for $12 each and that manufacturing and other costs are as follows:
Variable Cost per Unit Fixed Cost per month
Direct material $4.00 Factory overhead $17,000
Direct labor 0.40 Selling and administrative 8,000
Factory overhead 0.50
Distribution 0.10
Total $5.00 Total $25,000
The variable distribution costs are for transportation to mail-order distributors. Also assume the current monthly production and sales volume is 20,000 and monthly capacity is 25,000 units.
If the sales price per unit increases by $2.00 and unit sales decrease by 2,000 units, Anderson’s monthly profit would:
Answers: 3
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Anderson produces color cartridges for inkjet printers. Suppose cartridges are sold to mail-order di...
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