Unit selling price-unit variable cost-contribution margin

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Reference no: EM131284173

Wakky Company sells widgets for $55 each. The variable cost per widget is $44.55 and the total fixed cost is $639,100 annually. Alternative #1--- Lease a new packing machine for $20,000 annually which will increase fixed cost but reduce variable cost by $1.10 per widget. Alternative #2 ----Increase selling price by 8% to help offset an 30% increase in fixed cost. Alternative #3: Reduce fixed cost by 50% by moving to a lower rent location. This would cause variable cost to increase by 10%. Complete the grid below for the current level of production and each of the alternatives. For each alternative refer to the current data ( round to 3 decimal places if necessary). Unit selling price, unit variable cost, unit contribution margin, Contribution margin ratio, fixed cost and income.

Reference no: EM131284173

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Unit selling price-unit variable cost-contribution margin : Wakky Company sells widgets for $55 each. The variable cost per widget is $44.55 and the total fixed cost is $639,100 annually. Alternative #1--- Lease a new packing machine for $20,000 annually which will increase fixed cost but reduce variable cost..

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