Gregs Manufacturing produces tennis balls for sale to wholesalers for $42 per ca

Question

Gregs Manufacturing produces tennis balls for sale to wholesalers for $42 per case of 22 balls. The manager of the company estimates that the costs per case are as follows:

Y = ?

For every case of tennis balls sold, what is the contribution toward covering the fixed expenses and toward earning profits?

contribution margin?

per case?

      

Gregs Manufacturing produces tennis balls for sale to wholesalers for $42 per case of 22 balls. The manager of the company estimates that the costs per case are as follows:

Explanation / Answer

Answer:

1. The GS&A expense is fixed. So the linear equation is: Y = $69,000

2.

In$ in $ A Sales price per case 42 Variable Costs: Less: Direct material 4 Direct Labor 9 Variable overhead 6 B Total 19 A-B Contribution margin 23

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