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# assign 10-3 - But they will also make \$150,000 by renting...

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Exercise 11-6 Part 1 annual cost per mile annual depreciation 2000 1 annual tax and license 60 0.006 insurance 60 0.096 Rent 480 0.048 variable cost 0.08 1.23 \$ 1.23 per mile 1.23*10000 = 123000 per year Part 2 For 2 weeks, it will be 14*(1+.006+.096+.048) = 16.1 We are not using the variable operating cost because if she rents a car she wouldn’t have to pay for gas on her car, but she still has to pay tax, rent and insurance. Part 3 The price of the car will probably change the insurance and tax and license. Exercise 11-7 If they manufacture 20,000 themselves, per year it’ll be 500000. If they give it to another company, cost will be (23.50+6) *20000 = 590000

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Unformatted text preview: But they will also make \$150,000 by renting the space. So in all they will be making a profit of 60000 Exercise 11-8 selling price 60 90 80 variable exp direct mat 27 14 40 direct labor @\$8 96 256 128 var MO 3 8 4 total variable exp 126 278 172 contribution margin-66-188 344 contribution margin ratio-1.1-2.08889 4.3 I would recommend them to work on product C because when only considering the labor, Product C looks more profitable. (I am not sure how to calculate how much overtime should be paid. we don’t know how many products they can make per day)...
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assign 10-3 - But they will also make \$150,000 by renting...

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