Calculate the operating income that would result from the production managers pl

Question

Calculate the operating income that would result from the production managers plan to produce 96000 units at each point?

Peoria Moline Selling price 150 150 Variable manufactoring cost per unit 72 88 Fixed manufactoring cost per unit 30 15 Variable marketing and dist cost per unit 14 14 Fixed marketing and dist cost per unit 19 14.5 Total cost per unit 135 131.5 Operating income per unit 15 18.5 Production rate per day 400 units 320 units normal annual capacity usage 240 days 240 days maximum annual capacity 300 days 300 days

Explanation / Answer

Peoria Moline Selling price 150 150 Variable manufactoring cost per unit 72 88 Variable marketing and dist cost per unit 14 14 Contribution per unit 64 48 no of units 96000 96000 total contribution 6144000 4608000 fixed cost manufacturing cost 2880000 1440000 marketing cost 1824000 1392000 operating income 1440000 1776000

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