International Data Systems' information on revenue and costs is relevant only up to a sales volume...

 

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International Data Systems' information on revenue and costs is relevant only up to a sales volume of 109,000 units. After 109,000 units, the market becomes saturated and the price per unit falls from $4.00 to $3.80. Also, there are cost overruns at a production volume of over 109,000 units, and variable cost per unit goes up from $2.00 to $2.20. Fixed costs remain the same at $59,000. a. Compute operating income at 109,000 units. Operating income b. Compute operating income at 209,000 units. Operating income International Data Systems' information on revenue and costs is relevant only up to a sales volume of 109,000 units. After 109,000 units, the market becomes saturated and the price per unit falls from $4.00 to $3.80. Also, there are cost overruns at a production volume of over 109,000 units, and variable cost per unit goes up from $2.00 to $2.20. Fixed costs remain the same at $59,000. a. Compute operating income at 109,000 units. Operating income b. Compute operating income at 209,000 units. Operating income

Answer rating: 100% (QA)

a To compute the operating income at 109000 units we need to calculate the total revenue and total c... View the full answer