Answer:
Profit increase= $45
Explanation:
Giving the following information:
Q= 24,000 wings will be cooked and sold.
Wings, breading, and sauce $4,900
Direct labor (Variable) 3,500
Rent 1,100
Depreciation 900
Other fixed costs 400
Each wing sells for $0.80 each.
First, we need to calculate the unitary variable cost:
Wings, breading, and sauce= 4900/24000= 0.2042
Direct labor= 3500/24000= 0.1458
Total variable cost= 0.35
Now, we can calculate the increase in profit:
Q increase= 100 units
Profit increase= marginal contribution*100
Profit increase= (0.80-0.35)*100= $45
