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Elanso [62]
2 years ago
7

Lakeside Inc. produces a product that currently sells for $57.60 per unit. Current production costs per unit include direct mate

rials, $22; direct labor, $24; variable overhead, $11.00; and fixed overhead, $11.00. Product engineering has determined that certain production changes could refine the product quality and functionality. These new production changes would increase material and labor costs by 20% per unit. If Lakeside could sell the refined version of its product for $40 per unit, should it be processed further?
Business
1 answer:
Sidana [21]2 years ago
5 0

Answer:

It is convenient to make the changes.

Explanation:

Giving the following information:

Selling price= $57.60 per unit.

Direct materials= $22

Direct labor= $24

Variable overhead= $11.00

Fixed overhead= $11.00.

New costs:

Direct material cost= 22*1.2= $26.4

Direct labor cost= 24*1.2= $28.8

<u>I suppose that the selling price will increase by $40.</u>

To determine whether the changes increase profit or not, we need to calculate the unitary contribution margin per unit for both options:

Contribution margin= selling price - unitary variable cost

Actual Contribution margin:

Contribution margin= 57.6 - (22 - 24 - 11)= 0.6

New contribution margin:

Contribution margin= 97.60 - (26.4 - 28.8 - 11)= $31.4

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3 years ago
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Answer:

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Explanation:

Giving the following information:

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4 0
2 years ago
A senator from a state with several steel-rod factories explains that it is necessary to impose trade restrictions, such as a ta
Sergio [31]

Answer:

Jobs argument

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-The unfair-competition argument says that the domestic market has to be protected when there is unfair competition because companies from other countries are subject to different regulations.

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-Infant-industry argument says that new industries have to be protected because they don't have economies of scales that their competitors from others countries have.

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According to this, the answer is that the senator is using the jobs argument to argue for the trade restriction on steel rods because he claims that it is necessary to impose those restrictions to protect the workers from losing their jobs.

8 0
3 years ago
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8 0
3 years ago
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