Werner Company makes and sells disposable foil baking pans to retailers for $2.75 per pan. Variable cost per pan is given below:
Direct materials $0.37
Direct labor 0.63
Variable factory overhead 0.53
Variable selling expense 0.12
Fixed manufacturing cost total $111,425 per year. Administrative cost (all fixed) totals $48,350.
i) Determine unit variable cost?
ii) Compute unit variable manufacturing cost?
iii) Which is used in cost-volume-profit analysis and why?
iv) How many pans should be sold for Werner to earn operating income of $13,530?
v) How much sales revenue should Werner have to earn operating income of $13,530?