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Problem - Werner Company produces and sells disposable foil baking pans to retailers for $2.75 per pan. The variable cost per pan is as follows: Fixed manufacturing cost totals $111,425 per year. Administrative cost (all fixed) totals $48,350.
Required -
1. What is the unit variable cost? What is the unit variable manufacturing cost? Which is used in cost-volume-profit analysis and why?
2. How many pans must be sold for Werner to earn operating income of $13,530?
3. How much sales revenue must Werner have to earn operating income of $13,530?
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