Bragg & Stratton Company manufactures a specialized motor for chain saws. The company expects to manufacture and sell 30,000 motors in year 2001. It can manufacture an additional 10,000 motors without adding new machinery and equipment. Bragg & Stratton’s projected total costs for the 30,000 units are as follows:Direct Materials$150,000Direct labor300,000Manufacturing overhead: Variable portion100,000Fixed portion80,000Selling and administrative costs: Variable portion180,000Fixed portion70,000
The selling price for the motor is $80.
(a) What is the total manufacturing cost per unit if 30,000 motors are produced?
(b) What is the total manufacturing cost per unit if 40,000 motors are produced?
(c) What is the break-even price on the motors?