Question

Lancer Audio produces a high-end DVD player that sells for $1,300.Total operating expenses for July were as follows:
Units produced and sold 145
Component costs..... $ 68,000
Supplies.......... 2,500
Assembly labor....... 24,650
Rent.......... 2,300
Supervisor salary..... 5,600
Electricity....... 350
Telephone....... 280
Gas........... 300
Shipping......... 2,000
Advertising..... .. 2,600
Administrative costs... 15,000
Total......... $123,580

Required
a. Use account analysis to determine fixed cost per month and variable cost per DVD player.
b. Project total cost for August assuming production and sales of 165 units.
c. What is the contribution margin per DVD player?
d. Estimate total profit assuming production and sales of 165 units.
e. Lancer Audio is considering an order for 120 DVD players, to be produced in the next 10 months, from a customer in Canada. The selling price will be $950 per unit (well under the normal selling price).However, the Lancer Audio brand name will not be attached to the product.
What will be the impact on company profit associated with this order?



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  • CreatedSeptember 18, 2013
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