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Question;Ladanza Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for \$135.00 per unit.Sales volume (units) 11,000 12,120Cost of sales \$935,000 \$1,030,200Selling and administrative costs \$627,000 \$644,920The best estimate of the total contribution margin when 11,410 units are sold is:\$387,940\$501,970\$244,250\$167,57011:00Management of Modugno Corporation is considering whether to purchase a new model 370 machine costing \$496,000 or a new model 240 machine costing \$481,000 to replace a machine that was purchased 6 years ago for \$486,000. The old machine was used to make product M25A until it broke down last week. Unfortunately, the old machine cannot be repaired.Management has decided to buy the new model 240 machine. It has less capacity than the new model 370 machine, but its capacity is sufficient to continue making product M25A.Management also considered, but rejected, the alternative of simply dropping product M25A. If that were done, instead of investing \$481,000 in the new machine, the money could be invested in a project that would return a total of \$483,000.In making the decision to buy the model 240 machine rather than the model 370 machine, the differential cost was:\$5,000\$10,000\$15,000\$-3,00011:01At a sales volume of 43,000 units, Thoma Corporation's sales commissions (a cost that is variable with respect to sales volume) total \$580,500.To the nearest whole cent, what should be the average sales commission per unit at a sales volume of 40,400 units? (Assume that this sales volume is within the relevant range.)\$13.50\$14.19\$13.19\$12.87

Paper#41020 | Written in 18-Jul-2015

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