Tiny Tots Trikes (TTT), Inc. makes tricycles for toddlers. Sales and cost data is available for the current year below: Answer the following questions regarding Tiny Tots Trikes assuming that each scenario is independent.
a) If Tiny Tots Trikes were able to increase production and sales by 2,000 units without adding extra fixed costs, what would the unit variable cost and unit fixed cost be?
b) If Tiny Tots Trikes were able to increase production and sales by 3,000 units without adding extra fixed costs, what would the operating income be and by how much would it differ from the current year's amount? What would the new unit variable cost and unit fixed cost be under this scenario?
c) If Tiny Tots Trikes is able to increase production and sales by 3,000 units but have to add additional capacity to meet demand by incurring extra fixed costs of $30,000, what would the operating income be based on these changes? What would the new unit variable cost and unit fixed cost be under this scenario?

Question

Tiny Tots Trikes (TTT), Inc. makes tricycles for toddlers. Sales and cost data is available for the current year below:  Answer the following questions regarding Tiny Tots Trikes assuming that each scenario is independent. 
a) If Tiny Tots Trikes were able to increase production and sales by 2,000 units without adding extra fixed costs, what would the unit variable cost and unit fixed cost be?
b) If Tiny Tots Trikes were able to increase production and sales by 3,000 units without adding extra fixed costs, what would the operating income be and by how much would it differ from the current year's amount? What would the new unit variable cost and unit fixed cost be under this scenario?
c) If Tiny Tots Trikes is able to increase production and sales by 3,000 units but have to add additional capacity to meet demand by incurring extra fixed costs of $30,000, what would the operating income be based on these changes? What would the new unit variable cost and unit fixed cost be under this scenario?

Quizplus · Accepted Answer

The Answer of Tiny Tots Trikes (TTT), Inc. makes tricycles for toddlers. Sales and cost data is available for the current year below:  Answer the following questions regarding Tiny Tots Trikes assuming that each scenario is independent. 
a) If Tiny Tots Trikes were able to increase production and sales by 2,000 units without adding extra fixed costs, what would the unit variable cost and unit fixed cost be?
b) If Tiny Tots Trikes were able to increase production and sales by 3,000 units without adding extra fixed costs, what would the operating income be and by how much would it differ from the current year's amount? What would the new unit variable cost and unit fixed cost be under this scenario?
c) If Tiny Tots Trikes is able to increase production and sales by 3,000 units but have to add additional capacity to meet demand by incurring extra fixed costs of $30,000, what would the operating income be based on these changes? What would the new unit variable cost and unit fixed cost be under this scenario?