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What the low-margin should be produced

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Reference no: EM132536528

Problem 1: The Riley Corporation manufactures baseball bats and balls for the league teams. For every 3 bats sold, 5 balls are sold. Bats sell for $18 each, while balls sell for $6 each. Manufacturing variable costs for the bats are $6 each and for the balls $2 each. Calculate the break-even point in dollars for Riley if the fixed costs are $180,000. (Round your answer to the nearest whole unit).

Select one:

a. $ 25,714

b. $ 295,714

c. $ 540,000

d. $ 270,006

Problem 2: Dena Company temporarily has excess production capacity. The idle plant facilities can be used to manufacture a low-margin item. The low-margin should be produced if it can be sold for more than its

Select one:

a. variable costs plus any opportunity cost of the idle facilities

b. variable costs

c. direct costs

d. direct costs plus any opportunity cost of the idle facilities

Reference no: EM132536528

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