Reference no: EM132552977
Spotless, Inc., sells only one product. The sales price per unit is $50, with variable cost per unit of $40. Fixed costs are $60,000 per month. Maximum capacity is 34,000 units per month.
Answer the following questions: (show your computations)
Question a) To break-even, how many units must Spotless, sell per month?
Question b) If Spotless, Inc., sold 25,000 units, what would be its operating income for the month?
Question c) At present capacity, what is the maximum operating income Spotless, can expect to earn per month?
Question d) Assuming that direct labor cost can be reduced by $2 per unit, what would the maximum operating income be per month?
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