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39) The Melville Corporation mode l e de called a Pong. Melville has the capacity to produce 60,000 Pongs each year. If Melvi
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Answer #1
Per unit Total 6000 units
Incremental revenue 65 390000
Incremental costs:
Variable costs:
Direct materials 15 90000
Direct labor 12 72000
Variable manufacturing overhead 8 48000
Variable selling expense 2 12000
Total variable cost 37 222000
Fixed costs:
Purchase of special machine 9000
Total Incremental costs 231000
Incremental net operating income(loss) 159000
Option C $159,000 is correct
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