Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Direct materials $ 20
Direct labor 15
Overhead (60% variable) 20
Cost to manufacture $ 55
The above cost information is based on 10,000 units.
Parton currently sells 8,500 units for $62 per unit.
A distributor has offered to buy 1,000 units for $50 per unit.
We will have into account only the variable costs:
Unitary variable cost= 20 + 15 + (20*0.60)= 47
A) Increase in income= (50-47)*1000= $3,000
B) Regular units= 3000/(62 - 55)= 429 units
