Question - Game Corp produces and sells joysticks for the gaming market. The following unit cost information assumes a production and sales volume of 24,000 units per year
Cost per joystick -
Direct materials - 15
Direct labor - 23
Variable manufacturing overhead - 10
Fixed manufacturing overhead - 2
Variable selling and administrative costs - 2
Fixed selling and administrative costs - 8
(a) Compute the company's total yearly fixed costs.
(b) Calculate the budgeted selling price per joystick assuming that the company uses a cost-plus pricing strategy and a profit markup equal to 30% of Total manufacturing cost per unit.
(c) Using the selling price per joystick calculated in part (b), calculate the company's contribution margin per unit.
(d) Using the selling price you calculated in pat (b), calculate the company's breakeven point in units and sales dollars.
(e) Estimate the company's profit in dollars if it sells 19,000 joysticks.