BADM*2030 Chapter Notes - Chapter 8: Fixed Cost, Contribution Margin, Variable Cost

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23 Nov 2014
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Test chapter 8: relay corporation manufactures batons. Relay can manufacture 300,000 batons a year at a variable cost of ,000 and a fixed cost of ,000. Relay"s predictions for next year, 240,000 batons will be sold at the regular price of . 00 each. In addition, a special order was placed for 60,000 batons to be sold at a 40% discount off the regular price. Total fixed costs would be unaffected by this order. By what amount would the company"s operating income be increased or decreased as a result of the special order: a study has been conducted to determine if one of the departments in parry. Fixed expenses charged to the department are ,000 per year. It is estimated that ,000 of these fixed expenses could be eliminated if the department is discontinued. The unit product cost of these parts is: The part can be purchased from an outside supplier for per unit.

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