Submitted by: Submitted by Huntsberger
Views: 1589
Words: 444
Pages: 2
Category: Business and Industry
Date Submitted: 02/09/2011 06:11 AM
Peoria Moline
Selling price $150.00 $150.00
Variable manufacturing cost per unit $72.00 $88.00
Fixed manufacturing cost per unit 30.00 15.00
Variable marketing and distribution cost per unit 14.00 14.00
Fixed marketing and distribution cost per unit 19.00 14.50
Total cost per unit 135.00 131.50
Operating income per unit $ 15.00 $ 18.50
Production rate per day 400 units 320 units
Normal annual capacity usage 240 days 240 days
Maximum annual capacity 300 days 300 days
1. Calculate the breakeven point in units for the Peoria plant and for the Moline plant.
Selling price $150.00 $150.00
Variable manufacturing cost per unit $72.00 $88.00
Variable marketing and distribution cost per unit 14.00 $86.00 14.00 $102.00
Contribution margin per unit (CMU) $64.00 $48.00
0
Fixed manufacturing cost per unit 30.00 15.00
Fixed marketing and distribution cost per unit 19.00 49.00 14.50 29.50
Operating income per unit $ 15.00 $ 18.50
Manufacturing costs of additional units (overtime) ($3) $61.00 ($8) $40.00
Peoria Moline
Annual Fixed Costs $4,704,000.00 $2,265,600.00
Breakeven Volume = FC/CMU normal production Units 73,500 Units 47,200
2. Calculate the operating income that would result from the production manager's plan to product 96,000 units at each plant.
Peoria Moline
Units Produced and Sold 96,000 96,000
Normal Volume 96,000 76,800
Overtime 0 19,200
CMU Normal $6,144,000 $3,686,400
CMU Overtime $- $768,000
Total CMU $6,144,000 $4,454,400
Total Fixed Costs $4,704,000 $2,265,600
Operating Income $1,440,000 $2,188,800...