Sandusky Inc.has the following costs when producing 100,000 units: $$\begin{array} { l r }
\text { Variable costs } & \$ 600,000 \
\text { Fixed costs } & 900,000
\end{array}$$ An outside supplier is interested in producing the item for Sandusky.If the item is produced outside, Sandusky could use the released production facilities to make another item that would generate $150,000 of net income.At what unit price would Sandusky accept the outside supplier's offer if Sandusky wanted to increase net income by $120,000?

Question

Sandusky Inc.has the following costs when producing 100,000 units: $$\begin{array} { l r } 
\text { Variable costs } & \$ 600,000 \
\text { Fixed costs } & 900,000
\end{array}$$ An outside supplier is interested in producing the item for Sandusky.If the item is produced outside, Sandusky could use the released production facilities to make another item that would generate $150,000 of net income.At what unit price would Sandusky accept the outside supplier's offer if Sandusky wanted to increase net income by $120,000?

Quizplus · Accepted Answer

The Answer of Sandusky Inc.has the following costs when producing 100,000 units: $$\begin{array} { l r } 
\text { Variable costs } & \$ 600,000 \
\text { Fixed costs } & 900,000
\end{array}$$ An outside supplier is interested in producing the item for Sandusky.If the item is produced outside, Sandusky could use the released production facilities to make another item that would generate $150,000 of net income.At what unit price would Sandusky accept the outside supplier's offer if Sandusky wanted to increase net income by $120,000?

Sandusky Inc Variable costs $600,000 Fixed costs 900,000\begin{array} { l r } \text { Variable costs } & \$ 600,000 \\\text { Fixed costs } & 900,000\end{array} Variable costs Fixed costs ​$600,000900,000​

Sandusky Inc $\begin{array} { l r } \text { Variable costs } & \$ 600,000 \\\text { Fixed costs } & 900,000\end{array}$