Answer:
$4,500
Explanation:
The computation of the annual financial advantage (disadvantage) for the company is shown below:
Sales (9,000 units × 20.50) $184,500
Less: Variable costs:
Direct materials (9,000 units × $3.10) -$27,900
Direct labor (9,000 units × $1.50) -$13,500
Variable manufacturing overhead (9,000 units × $6.40) $57,600
Increase in variable costs (9,000 units × $5) -$45,000
Less: Investment in special molds -$36,000
Financial advantage $4,500
We simply deduct the all cost from the sales so that the financial advantage could come
