Sandra's average selling price is $1,000 per cake; fixed-MOH costs are $67,000 and are included in...

 

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Sandra's average selling price is $1,000 per cake; fixed-MOH costs are $67,000 and are included in COGS. All other product costs vary based on volume. Average variable operating expenses are $106 per cake; remaining operating expenses are fixed. After thinking about it further, she realizes she'll avoid the variable operating expenses on the special-event cakes. To keep her existing sales volume and take on the new convention center events, Sandra would need to hire additional employees who would "invade" her home while she and her family sleep. Hiring dependable night-shift workers would increase her variable product costs per unit by 10%. If she maintains her existing sales and takes on the new events under these circumstances, how much total operating income will she show for next year? Sandra's average selling price is $1,000 per cake; fixed-MOH costs are $67,000 and are included in COGS. All other product costs vary based on volume. Average variable operating expenses are $106 per cake; remaining operating expenses are fixed. After thinking about it further, she realizes she'll avoid the variable operating expenses on the special-event cakes. To keep her existing sales volume and take on the new convention center events, Sandra would need to hire additional employees who would "invade" her home while she and her family sleep. Hiring dependable night-shift workers would increase her variable product costs per unit by 10%. If she maintains her existing sales and takes on the new events under these circumstances, how much total operating income will she show for next year?

Answer rating: 100% (QA)

Solution To calculate Sandras total operating income for next year we need to consider the following ... View the full answer