10QuestionView PoliciesCurrent Attempt in ProgressIt costs Concord Company $26 per unit ($18 variable and $8 fixed)to produce its product, which normally sells for $38 per unit. Aforeign wholesaler offers to purchase 6400 units at $21 each.Concord would incur special shipping costs of $2 per unit if theorder were accepted. Concord has sufficient unused capacity toproduce the 6400 units. If the special order is accepted, what willbe the effect on net income?O $6400 decreaseO $19200 increaseO $115200 increaseO $6400 increase

Net income: Net income is the excess amount of revenue after deducting all the expenses of a…

Answered: 10 Question View Policies Current…

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter16: Financial Planning And Control

Section: Chapter Questions

Problem 5PROB

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39. Use this information for Falcon Co. to answer the question that follow.Falcon Co. produces a single product. Its normal selling price is $30 per unit. The variable costs are $19 per unit. Fixed costs are $25,000 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,500 units with a special price of $20 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $1 per unit would be eliminated.Should the special order be accepted? a.The answer cannot be determined from the data given. b.There would be no difference in accepting or rejecting the special order. c.yes d.no
33. Use this information for Stryker Industries to answer the question that follow. Stryker Industries received an offer from an exporter for 25,000 units of product at $17 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price $22 Unit manufacturing costs: Variable 10 Fixed 6 What is the differential cost from the acceptance of the offer? a.$425,000 b.$550,000 c.$250,000 d.$150,000
Ma1. 7) Bluebird Manufacturing has received a special one-time order for 16,600 bird feeders at $4.60 per unit. Bluebird currently produces and sells 75,000 units at $8.60 each. This level represents 80% of its capacity. Production costs for these units are $5.10 per unit, which includes $3.85 of variable costs and $2.85 of fixed costs. If the special offer is accepted, there will be no incremental fixed cost. If Bluebird accepts this additional business, the effect on income will be: Multiple Choice $12,450 increase. $8,300 decrease. $76,360 increase. $63,910 increase. $63,910 decrease.
38. Use this information for Falcon Co. to answer the question that follow. Falcon Co. produces a single product. Its normal selling price is $27 per unit. The variable costs are $18 per unit. Fixed costs are $18,700 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,490 units with a special price of $21 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $2 per unit would be eliminated. If the order is accepted, what would be the impact on net income? a.increase of $9,685 b.increase of $5,960 c.decrease of $4,470 d.increase of $7,450
Q3The Fresno Company manufactures slippers and sells them at $13 a pair. Variable manufacturing cost is $6.50 a pair, and allocated fixed manufacturing cost is $2.00 a pair. It has enough idle capacity available to accept a one-time-only special order of 5,000 pairs of slippers at $8.50 a pair. Fresno will not incur any marketing costs as a result of the special order. What is the amount of increase in operating income if the special order is accepted?
Marie Company’s unit manufacturing costs are: Variable Cost P50 Fixed Cost 25 A special order for 2,000 units has been received from a foreign company. The unit selling price requested is P55. The normal unit selling price is P80. If the order is accepted, unit variable costs will increase by P2 for additional freight costs. Marie has sufficient capacity to accommodate the special order. How much is the incremental profit or loss if the order is accepted?
(5) Stryker Industries received an offer from an exporter for 24,000 units of product at $17 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price $21 Unit manufacturing costs: Variable 10 Fixed 3 What is the differential cost from the acceptance of the offer? a.$408,000 b.$240,000 c.$504,000 d.$72,000
Answer 1234 with solution Alexi Division of Dezi Company makes and sells only one product. Annual data on Alexi division’s single products follows: Unit selling price ............................. P50 Unit variable cost ............................. 30 Total fixed costs .............................P200,000 Average operating assets ............... 750,000 Minimum required rate of return ........ 12% If Alexi sells 15,000 units per year, how much is the residual income? If Alexi sells 16,000 units per year, what is the return on investment? Suppose the manager of Alexi division desires a return on investment of 22%. In order to achieve this goal, how many units per year Alexi division must sell? Suppose the manager of Alexi division desires an annual residual income of P45,000. In order to achieve this, how many units Alexi division should sell?
Practice 3: Bob Company, a sole proprietorship, sells only one product. The regular price is $160. Variable costs are 55% of this selling price, and fixed costs are $8,400 a month. Management decides to decrease the selling price from $160 to $145 per unit. Assume that the cost of the product and the fixed operating expenses are not changed by this pricing decision. At the original selling price of $160 a unit, what is the contribution margin ratio? ________% At the original selling price of $160 a unit, what dollar volume of sales per month is required for Bob Company to break-even? (Round your answer to the nearest whole dollar.) $________ At the original selling price of $160 a unit, what dollar volume of sales per month is required for Bob Company to earn a monthly operating income of $6,500? (Round your answer to the nearest whole dollar.) $________ At the reduced selling price of $145 a unit, what is the contribution margin ratio? ________% At the reduced selling…

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