ACCT 202 Study Guide - Final Guide: Variable Cost
Document Summary
Digabriele co. is currently producing 20,000 components at a cost of per unit. At this level of production, total fixed overhead costs are ,000. An outside supplier has offered to sell 20,000 units to digabriele for a unit. The normal production per-unit costs are shown below: Consider the following two situations independently: assume the space used to produce the component could be leased to another company for ,000. Pinto manufacturing. has a capacity of producing 300,000 units a year and sells them at. Fixed overhead is budgeted at ,200,000 while fixed administration costs are estimated to be ,000. A foreign distributor has made a one-time offer to purchase 40,000 units at a unit. The customer will pay all freight costs and no commissions will be paid on this order, so variable selling costs will be reduced by 40%. The sales manager has collected the following per-unit data on pinto"s operating costs:
