Answer:
Instructions are below.
Explanation:
Giving the following information:
Selling Price $284 per unit
Administrative Cost $500,000
Advertising Cost $700,000
(a) Units= 18,500
Direct labor= $50
Direct material= $88
Sales= 18,500*284= 5,254,000
Variable costs= (50 + 88)*18,500= (2,553,000)
Contribution margin= 2,701,000
Administrative Cost= (500,000)
Advertising Cost= (700,000)
Net operating income= 1,501,000
B)Units= 9,500
Direct labor= $51
Direct material= $101
Sales= 9,500*284= 2,698,000
Variable costs= (51 + 101)*9,500= (1,444,000)
Contribution margin= 1,254,000
Administrative Cost= (500,000)
Advertising Cost= (700,000)
Net operating income= 54,000
