Question MA2.29: The following results were achieved in the last accounting p...

The following results were achieved in the last accounting period:

r = $50,000     w = $16,000     t = 800 units           u = 2,500 units

The company expects to make and sell an additional 1,400 units in the next accounting period. If variable cost per unit, selling price per unit and total fixed costs remain  unchanged, profit will increase by $ \boxed{\ \ \ \ \ \ \ \ \ \ \ \ }

The blue check mark means that this solution has been answered and checked by an expert. This guarantees that the final answer is accurate.
Learn more on how we answer questions.

Profit will increase by $28,000.
Contribution per unit  = (w+ r)/(t + u) = $(16,000 + 50,000)/(800 + 2,500) =  $20
Increase in profit = 1,400 additional units × $20 = $28,000

Related Answered Questions