Answer:
(1) $132,000
(2) $66,000
Explanation:
Selling price per unit:
= Sales ÷ No. of units
= $400,000 ÷ 5,000
= $80
Variable cost per unit:
= variable cost ÷ No. of units
= $247,000 ÷ 5,000
= $42
Alternative 1:
Contribution margin = Sales - variable cost
= (5,000 × $80 × 1.1) - (5,000 × $42)
= $440,000 - $210,000
= $230,000
Net income = Contribution margin - Fixed cost
= $230,000 - $98,000
= $132,000
Alternative 2:
Contribution margin:
= sales - variable cost
= $400,000 - ($400,000 × 59%)
= $400,000 - $236,000
= $164,000
Net income = Contribution margin - Fixed cost
= $164,000 - $98,000
= $66,000
Answer:
Number of air conditioners to be produced = 40
Optimal solution value = $1,900
Explanation:
See attached pictures.
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