The Gregoire Company has a maximum production capacity of 35,000 units per year. For that capacity...

Transcribed Image Text:

The Gregoire Company has a maximum production capacity of 35,000 units per year. For that capacity level, fixed costs are $340,000 per year. Variable costs per unit are $65. In the coming year, the company has orders for 40,500 units at $95. The company wants to make a minimum overall operating income of $155,000 on these 40,500 units. Requirement What maximum unit purchase price would Gregoire Company be willing to pay to a subcontractor for the additional 5,500 units it cannot manufacture itself to earn an operating income of $155,000? Determine the maxiumum total cost to Gregoire Company of producing the 40,500 units while earning an operating income of $155,000. Total costs to produce 40,500 units is 3,692,500 Identify the total cost to Gregoire Company to manufacture 35,000 units. Total costs to manufacture 35,000 units The Gregoire Company has a maximum production capacity of 35,000 units per year. For that capacity level, fixed costs are $340,000 per year. Variable costs per unit are $65. In the coming year, the company has orders for 40,500 units at $95. The company wants to make a minimum overall operating income of $155,000 on these 40,500 units. Requirement What maximum unit purchase price would Gregoire Company be willing to pay to a subcontractor for the additional 5,500 units it cannot manufacture itself to earn an operating income of $155,000? Determine the maxiumum total cost to Gregoire Company of producing the 40,500 units while earning an operating income of $155,000. Total costs to produce 40,500 units is 3,692,500 Identify the total cost to Gregoire Company to manufacture 35,000 units. Total costs to manufacture 35,000 units

Answer rating: 100% (QA)

To find out the maximum unit purchase price Gregoire Company would be willing to pay to a subcontrac... View the full answer