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nikklg
21 day ago
12

Novak Corp. reported net income of $1.20 million in 2022. Depreciation for the year was $192,000, accounts receivable decreased

$420,000, and accounts payable decreased $336,000. Compute net cash provided by operating activities using the indirect approach. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Business
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Response:

Minimum selling price= $28

Reasoning:

Based on the information provided:

Direct materials $8

Direct labor $9

Variable manufacturing costs= $7

Landor has received a special order for 25,000 fans destined for an overseas buyer.

The only incurred selling cost for this order will be $4 per fan for shipping.

Given that this is a special request and there is available capacity, fixed costs will not be considered in this analysis.

The minimum price needed equals the total variable cost per unit. It is not a sustainable price long-term.

Variable cost per unit= 8 + 9 + 7 + 4= $28

[[TAG_55]]Minimum selling price= $28[[TAG_56]]
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