Alton Inc. is working at full production capacity producing 25,000 units of a uniqueproduct. Manufacturing costs per unit for the product are as follows:Direct materials$ 6Direct labor5Manufacturing overhead7Total manufacturing cost per unit$18The per-unit manufacturing overhead cost is based on a $4 variable cost per unit and$75,000 fixed costs. The nonmanufacturing costs, all variable, are $6 per unit, and thesales price is $31 per unit.Sports Headquarters Company (SHC) has asked Alton to produce 6,000 units of amodification of the new product. This modification would require the samemanufacturing processes. However, because of the nature of the proposed sale, theestimated nonmanufacturing costs per unit are only $3 (not $6). Alton would sell themodified product to SHC for $21 per unit.Required1-a. Calculate the contribution margin for 6,000 units for both the current and specialorder.1-b. Should Alton produce the special order for SHC?2. Suppose that Alton Inc. had been working at less than full capacity to produce20,500 units of the product when SHC made the offer. What is the minimum price perunit that Alton should accept for the modified product under these conditions?

Variable cost is the production cost that will change with the change of production level of the…

Required 1-a. Calculate the contribution margin for 6,000 units for both the current and special order. 1-b. Should Alton produce the special order for SHC? 2. Suppose that Alton Inc. had been working at less than full capacity to produce 20,500 units of the product when SHC made the offer. What is the minimum price per unit that Alton should accept for the modified product under these conditions?

Required 1-a. Calculate the contribution margin for 6,000 units for both the current and special order. 1-b. Should Alton produce the special order for SHC? 2. Suppose that Alton Inc. had been working at less than full capacity to produce 20,500 units of the product when SHC made the offer. What is the minimum price per unit that Alton should accept for the modified product under these conditions?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

A large wood products company is negotiating a contract to sell plywood overseas. The fixed cost that can be allocated to the production of the plywood is $84309 per month. The variable cost per thousand board feet is $220.0 for demand 2176 units. The price charged will be determined by P-$739-0.07D per 1000 board feet. For this situation, calculate the profit for the mentioned scenario. Select one: a. 1045034.93 O b. 713586.68 C. 3498584082.68 d. 1213500.68
F Given Cost and Revenue functions C(q)=q³-8q² +59q + 5000 and R(q) = -3 -39² +2600q, what cost is incurred when marginal profit is $0? The costs are $ (Round to nearest cent.)
Holding costs are 35 MU/unit/year. The ordering cost is 120 MU/order, andsales are reletively constant at 400/month.a) What is the optimal order quantity?b) What is the annual total inventory cost? Please mention formulas and do it in detail so I can understand.
don't use Al bot or chat GPT otherwise downvote.correct answer will get instant upvote show calculation
Bags/Participants Fixed Cost Variable Cost Total Cost 0 $1,700 $ - $1,700 100 $1,700 $500 $2,200 200 $1,700 $1,200 $2,900 300 $1,700 $2,700 $4,400 400 $1,700 $5,200 $6,900 500 $1,700 $9,000 $10,700 600 $1,700 $15,000 $16,700 700 $1,700 $23,800 $25,500 800 $1,700 $36,800 $38,500 900 $1,700 $55,800 $57,500 1,000 $1,700 $83,000 $84,700 Given the above information on cost, if you charge $15 per entry, what is the breakeven quantity of bags that you should order? At what quantity of bags will profits be maximized? A Use the profit maximizing rule, MR ≥ MC, buy 300 bags. B Use the profit maximizing rule, MR ≥ MC, buy 200 bags. C Use Qb = F/(MR-AVC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 300. D Use Qb = F/(MR-AVC) where Qb is the breakeven quantity to be determined, the optimal quantity of bags is 200.
Give an example of the Equivalent Annual Operating Cost?
(a) What is the profit-maximizing level of output and how much daily profit will the producer below earn if the price of pizza is $ 2.50 per slice? MC Salice ATC (AVC 2.50 1.40 slices/day 570
Please refer to the figure below. The equation for p = 105-0.005D 25,000+65D Y D (units sold) How much is the fixed cost? ОА. BD65 о В. BD22,500 ОС. BD12,500 O D. BD25,000 Cost/Revenue
A dining room set costs $400, less 30% and 10%. The overhead costs are 25% of cost and operating profit is 30% of cost. What is the break-even price of the set?
show complete solution on a paper