Martin Corporation sells component parts for the electronics industry. Martin Corporation currently sells 160,000 units per year at a price of $6.50 per unit; its variable cost is $4.00 per unit; and fixed costs are $350,000 for the year. Martin is considering expanding into two additional states, which would increase its fixed costs to $570,000 and would increase its variable unit cost to an average of$4.24 per unit. If Martin expands, it expects to sell 250,000 units at $7.10 per unit.
1. How much operating profit (EBIT) is Martin Corporation currently realizing, with a sales volume of 160,000
units per year?
a. What is Martin Corporation
Martin Corporation sells component parts for the electronics industry. Martin Corporation currently sells 160,000 units per year at a price of $6.50 per unit; its variable cost is $4.00 per unit; and fixed costs are $350,000 for the year. Martin is considering expanding into two additional states, which would increase its fixed costs to $570,000 and would increase its variable unit cost to an average of$4.24 per unit. If Martin expands, it expects to sell 250,000 units at $7.10 per unit.
1. How much operating profit (EBIT) is Martin Corporation currently realizing, with a sales volume of 160,000
units per year?
a. What is Martin Corporation
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| Gwinnett Barbecue Sauce Corporation manufactures a specialty barbecue sauce. Gwinnett has the capacity to manufacture and sell 20,000 cases of sauce each year but is currently only manufacturing and selling 18,000. The following costs relate to annual operations at 18,000 cases: |
| Total Cost | |
| Variable manufacturing cost | $288,000 |
| Fixed manufacturing cost | $64,000 |
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increase by $1,800
decrease by $2,000
decrease by $18,000
decrease by $12,000
