Hurricane Wings has budgeted the following costs for a month in which 24,000 wings will be cooked and sold.
$\begin{array}{lr}
\text { Wings, breading, and sauce } & \$ 4,900 \
\text { Direct labor (Variable) } & 3,500 \
\text { Rent } & 1,100 \
\text { Depreciation } & 900\
\text { Other fixed costs }&400
\end{array}$
Each wing sells for $0.80 each. How much would Hurricane Wing's profit increase if 100 more wings were sold?

Question

Quizplus · Accepted Answer

The variable cost per wing is $0.1458 ($4,900 + $3,500 / 24,000). If 100 more wings are sold, the variable cost will increase by $14.58 ($0.1458 x 100). The selling price of 100 more wings is $80 ($0.80 x 100). Therefore, the profit will increase by $65.42 ($80 - $14.58).

Hurricane Wings Has Budgeted the Following Costs for a Month