FDE Manufacturing Company has a normal plant capacity of 37,500 units

QUESTION

FDE Manufacturing Company has a normal plant capacity of 37,500 units per month. Because of an extra large quantity of inventory on hand, it expects to produce only 30,000 units in May. Monthly fixed costs and expenses are $112,500 ($3 per unit at normal plant capacity) and variable costs and expens
Differential analysis report: Particulars Normal Increased sales Sales revenue: (selling price x units sold) 506,250 580,500 Variable costs (variable cost per unit x

units) 309,375 371,250 Contribution margin 196,875 209,250 Fixed costs 112,500 112,500 Net income 84,375 96,750

ANSWER:

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