Week1_Bancroft

Week1_Bancroft - Sellingprice Variablecostsperunit:...

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Selling price Variable costs per unit:   Direct materials   Direct manufacturing labor   Variable manufacturing overhead   Variable marketing costs Contribution margin per unit Contribution margin  Manufacture Orangebo Selling price $20 Variable costs per unit: Purchase costs Direct materials 5 Direct manufacturing labor 7 Variable manufacturing costs 4 Variable marketing overhead 1 Variable costs per unit $17 Contribution margin per unit 3 Contribution margin from selling  $10,500 No, they should not take the offer. Th and not making any Orangebo.
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$26 $5 1 4 2 $12 $14 $49,000 Purchase Rosebo Total $26 18 8 $28,000 $38,500 hey would make more money making all 13,000 Rosebo 
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Relevant revenues $4,000 Relevant costs Direct materials $1.60 Direct manufacturing labor 0.90 Variable manufacturing overhead 0.70 Variable selling costs $3.20 Total relevant costs $3,200 Increase in operating income $800 Dill Company would've increased operating income by $800. 
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Week1_Bancroft - Sellingprice Variablecostsperunit:...

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