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The Anderson Company has a maximum production capacity of 25,000 units per year

Accounting

The Anderson Company has a maximum production capacity of 25,000 units per year. For that capacity? level, fixed costs are $290,000 per year. Variable costs per unit are $45. In the coming? year, the company has orders for 29,500 units at $80. The company wants to make a minimum overall operating income of $185,000 on these 29,500 units.

Requirement

What maximum unit purchase price would Anderson Company be willing to pay to a subcontractor for the additional 4,500 units it cannot manufacture itself to earn an operating income of $185,000??

 

Determine the maxiumum total cost to Anderson Company of producing the 29,500 units while earning an operating income of $185,000.

Total costs to produce 29,500 units is

 

Identify the total cost to Anderson Company to manufacture 25,000 units.

Total costs to manufacture 25,000 units

 

Determine the maxiumum additional costs to purchase 4,500 units from a subcontractor that Anderson Company would pay in order to earn an operating income of $185,000.

The additional costs to purchase 4,500 units from a subcontractor is

What maximum unit purchase price would Anderson Company be willing to pay to a subcontractor for the additional 4,500 units it cannot manufacture itself to earn an operating income of $185,000?? ?(Round your answer to the nearest? cent.)

The maximum price per unit that can be paid to a subcontractor is

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