Calculate the incremental profit electron control would earn

Assignment Help Econometrics

Reference no: EM131271603

Electron Control, Inc., sells voltage regulators to other manufacturers, who then customize and distribute the products to quality assurance labs for their sensitive test equipment. The yearly volume of output is 15,000 units. The selling price and cost per unit are shown below:

Selling price		$200
Costs:
Direct material	$35
Direct labor	50
Variable overhead	25
Variable selling expenses	25
Fixed selling expenses	15	150
Unit profit before tax		$ 50

Management is evaluating the alternative of performing the necessary customizing to allow Electron Control to sell its output directly to Q/A labs for $275 per unit. Although no added investment is required in productive facilities, additional processing costs are estimated as:

Direct labor	$25 per unit
Variable overhead	$15 per unit
Variable selling expenses	$10 per unit
Fixed selling expenses	$100,000 per year

Calculate the incremental profit Electron Control would earn by customizing its instruments and marketing directly to end users.

Reference no: EM131271603

Questions Cloud

What does it mean to describe a reaction as reversible : What does it mean to describe a reaction as "reversible"? When writing an equation, how is a reversible reaction distinguished from a nonreversible reaction? If a reaction is reversible, when can it be said to have reached equilibrium?

Basic code and data of economics : Lets say if you go to a carrom playing App and want to analyse its working and please download any app and using Emulator extract the code needed to design a new app based on same algorithm. Please send me the basic code and data of economics that..

Understanding advertising as commercial poetry : Which of the following is considered the first advertisement to show the “ powers of associated value?” Understanding advertising as “commercial poetry” frees advertisers from the need for truth in advertising according to whom?

Write an analysis of one of the city of chicago colleges : Write a 4-6 page analysis of one of the City of Chicago colleges, East-West University's website.- Include: Intro Summary on strengths and weaknesses.- How many pages the website has.- Compare to another city of Chicago college websites.

Calculate the incremental profit electron control would earn : Calculate the incremental profit Electron Control would earn by customizing its instruments and marketing directly to end users.

Identify the required pre-workshop activities : Identify the required pre-workshop activities. Determine the top five (5) threats in a risk register following Figure B-11, Sample Simplified Risk Register Format (Appendix B of the Hillson and Simon text). Include information from the case for eac..

What is meant by the culture of society : What is meant by the culture of a society, and why is it important that international managers understand it? Describe the four dimensions of culture proposed by Hofstede. What is one of the managerial implications of these dimensions?

Illustrate the relative values of the three measures : Explain the differences between the following three measures of damages for breach of contract: expectation damages, opportunity cost damages, and reliance damages.

Demand uncertainty add to relevant annual inventory cost : Suppose you are playing the Littlefield Game and you forecast that the daily demand rate stabilizes after day 120 at a mean value of 15 units per day with a standard deviation of 4 units per day. Calculate a good reorder point, r, corresponding to a ..

User Account

All Pages