Cell Peak produces shelving units. The variable cost of each shelving unit comprises of direct materials of $21, direct labor of $10, packaging costs of $7 and variable overheads of $2. Cell Peak has fixed overheads of $259124 and sells its shelving units for $75 each. Current sales are 25,000 shelving units per annum. What profit would CellPeak make if the company sold 18,000 shelving units?

Cell Peak produces shelving units. The variable cost of each shelving unit comprises of direct materials of $21, direct labor of $10, packaging costs of $7 and variable overheads of $2. Cell Peak has fixed overheads of $259124 and sells its shelving units for $75 each. Current sales are 25,000 shelving units per annum. What profit would CellPeak make if the company sold 18,000 shelving units?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 7MC

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CellPeak produces shelving units. The variable cost of each shelving unit comprises of direct materials of $30, direct labor of $7, packaging costs of $7 and variable overheads of $2. CellPeak has fixed overheads of $252513 and sells its shelving units for $75 each. Current sales are 25,000 shelving units per annum. What profit would CellPeak make if the company sold 18,000 shelving units?
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