Question: Wolve Corp. is working at full production capacity producing 1 0 , 0 0 0 units of a unique product, AutoA. Manufacturing costs per unit

Wolve Corp. is working at full production capacity producing 10,000 units of a unique product, AutoA. Manufacturing costs per unit for AutoA follow:Direct materialsDirect manufacturing laborManufacturing overhead4$238000Roba2000buy 200012000sellThe unit manufacturing overhead cost is based on a variable cost per unit of $2 and fixed costs of $30,000(at full capacity of 10,000 units).The nonmanufacturing costs, all variable, are $4 per unit, and the selling price is $20 per unit.A customer, the Lionn Co., has asked Wolve to produce 2,000 units of a modification of AutoA to be called Robo_T. Robo_T would require the same manufacturing processes as AutoA, and the Lionn Co. has offered to share equally the nonmanufacturing costs with Wolve. Robo_T will sell at $15 per unit.Required1. How many units are at the break-even point?3-8000|1000 RobT2. If you want to get a profit of $5,000, how many units you have to sell?3. What is the opportunity cost to Wolve of producing the 2,000 units of Robo_T?4. The Foxx Corp. has offered to produce 2,000 units of AutoA for Wolve so that Wolve may accept the Robo_T offer. Foxx would charge WolveSlowy on calerations po po Care por 0a.e pot )(Show your calculations)5. Suppose Wolve had been working at less than full capacity, producing8,000 units of AutoA at the time the Robo_T offer was made. What is the minimum price Wolve should accept for Robo_T under these conditions?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!