27 vaughn companys selling divisions unit sales price is 41...

27) Vaughn Company's Selling Division's unit sales price is $41 and its unit variable cost is $15. Its capacity is 9,000 units. Unit fixed cost are $5. Current outside sales are 9,000 units. What is the Selling Division's opportunity cost per unit from selling 2,000 units to the Purchasing Division? A. $41 B. $0 C. $26 D. $21

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00:01 Hello students, here is a question.

00:02 The owns company budgeted sales of 20 ,000 printers at $90 per unit last year.

00:08 The variable manufacturing costs were budgeted at $46 per unit and fixed manufacturing costs at $12 per unit.

00:15 A special order from 1 ,000 printers at $72 each received owners in april.

00:22 There is enough plant capacity to meet these additional units without incurring an additional fixed manufacturing cost.

00:29 However, the production would have been done over time basis to estimated additional cost of $5 per printer.

00:36 So, accept a special order would not affect the owns normal sales and no selling expenses would be incurred.

00:42 What would be the increase to the net operating income if the special order were accepted? so, this is our question.

00:48 Let us do the solution for this and we have few options given in the question.

00:52 We have to choose which option would be the correct suitable for this.

00:55 So, let us do the solution.

00:57 So, first we need to calculate the contribution margin per unit.

01:01 So, it is a calculation of contribution margin per unit.

01:12 So, to calculate this we use a formula that sales price per unit minus variable cost.

01:17 Sales price minus variable cost per unit...

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