Cora Corporation produces refrigerator units. The company's normal production and sales volume of Standard units...
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Cora Corporation produces refrigerator units. The company's normal production and sales volume of Standard units is 5,250 units per month, and units sell for $960 each. The costs of manufacturing and marketing a Standard model are as follows: Window Ship Variable manufacturing cost per unit Variable marketing cost per unit Fixed product cost Fixed period cost $ 330 85 525,000 420,000 The company is considering diversifying the product line to include two additional models, Economy and Deluxe, which would sell for $820 and $960 per unit, respectively. The costs of manufacturing these new models are as follows: Variable manufacturing cost Variable marketing cost Economy 42% below Standard 5% above Standard Deluxe $585 Twice Standard Total fixed product and period costs are expected to remain unchanged. Cora expects to sell 2,100 units of the Economy model and 1,850 units of Deluxe model per month. The company cannot expand its production capacity beyond its current level of 5,250 units. Required: 1. If Standard Model is the only product,what would the Operating income be? Operating income
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