3 7Letermine whether to accept special order.BE7-3 (LO 2) Waterloo Co. sells product P-14 at a price of $48 a unit. The per-unit cost data are direct materials $15, direct labour $10, and overhead $12 (75% variable). WaterlooCo. has sufficient capacity to accept a special order for 40,000 units, but at a discount of 25% from the regular price. Selling costs associated with this onder would be 83 per unit.Determine whether Waterloo Co. should accept the special order.Determine whether to accept special order.

Special order decision refers to all those decisions or situation of the management in which they…

Answered: 7 cept special order. BE7-3 (LO 2)…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 4EA: Zena Technology sells arc computer printers for $55 per unit. Unit product costs are: A special...

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Zena Technology sells arc computer printers for $55 per unit. Unit product costs are: A special order to purchase 15,000 arc printers has recently been received from another company and Zena has idle capacity to fill the order. Zena will incur an additional $2 per printer for additional labor costs due to a slight modification the buyer wants made to the original product. One-third of the manufacturing overhead costs is fixed and will be incurred no matter how many units are produced. When negotiating the price, what is the minimum selling price that Zena should accept for this special order?
Break-even sales under present and proposed conditions Kearney Company, operating at full capacity, sold 400,000 units at a price of $246.60 per unit during 20Y5. Its income statement for 20Y5 is as follows: The division of costs between fixed and variable is as follows: Management is considering a plant expansion program that will permit an increase of $8,631,000 (35.000 units at $246.60) in yearly sales. The expansion will increase fixed costs by $3,600,000 but will not affect the relationship between sales and variable costs. Instructions Determine for 20Y5 the total fixed costs and the total variable costs.
Break-even sales under present and proposed conditions Kearney Company, operating at full capacity, sold 400,000 units at a price of $246.60 per unit during 20Y5. Its income statement for 20Y5 is as follows: The division of costs between fixed and variable is as follows: Management is considering a plant expansion program that will permit an increase of $8,631,000 (35.000 units at $246.60) in yearly sales. The expansion will increase fixed costs by $3,600,000 but will not affect the relationship between sales and variable costs. Instructions Determine the maximum operating income possible with the expanded plant.
841 Smooth Move Company manufactures professional paperweights and has been approached by a new customer with an offer to purchase 15,000 units at a per-unit price of $7.00. The new customer is geographically separated from Smooth Move's other customers, and existing sales will not be affected. Smooth Move normally produces 86,000 units but plans to produce and sell only 65,000 in the coming year. The normal sales price is $12 per unit. Unit cost information is as follows: Direct materials $3.10 Direct labor 2.50 Variable overhead 1.15 Fixed overhead 1.80 Total $8.55 Suppose a customer wants to have its company logo affixed to each paperweight using a label. Smooth Move would have to purchase a special logo labeling machine that will cost $12,000. The machine will be able to label the 15,000 units and then it will be scrapped (with no further value). No other fixed overhead activities will be incurred. In addition, each special logo requires additional direct materials of…
34 Waterway Co. sells product P-14 at a price of $48 a unit. The per-unit cost data are direct materials $16, direct labour $12, and overhead $12 (75% variable). Waterway Co. has sufficient capacity to accept a special order for 39,300 units, but at a discount of 25% from the regular price. Selling costs associated with this order would be $3 per unit. Determine whether Waterway Co. should accept the special order. (Enter loss with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).) Please donot provide solution in image format and it should be in step by step format and provide fast solution
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.
E6.5 (LO 1), AP Carey Company had sales in 2021 of $1,500,000 on 60,000 units. Variable costs totaled $900,000, and fixed costs totaled $500,000. A new raw material is available that will decrease the unit variable costs by 20% (or $3). However, to process the new raw material, fixed operating costs will increase by $100,000. Management feels that one-half of the decline in the unit variable costs should be passed on to customers in the form of a sales price reduction. The marketing department expects that this sales price reduction will result in a 5% increase in the number of units sold. Instructions Prepare a projected CVP income statement for 2022 (a) assuming the changes have not been made, and (b) assuming that changes are made as described. Compute break-even point in sales units for a company with more than one product.
Lucifer Company sells its product A at a selling price of P42 per unit. Lucifer’s costs per unit basedon the full capacity of 200,000 units are as follows:Direct materials P 8.00Direct labor 10.00Overhead 12.00Overhead costs were 40% fixed. A special order offering to buy 40,000 units were received from aforeign distributor. The only selling costs that would be incurred amounts to P6 per unit for shipping(as oppose to P12 per unit on regular customers). Lucifer has sufficient existing capacity tomanufacture the additional units. a. What is the minimum selling price per unit that the Company may accept? b. Assume that the company is already operating at full capacity and could only accommodate theforeign distributor only by cancelling sales from regular customers, what would be the minimumselling price?
(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
The Carlo Company has received a special order for 600 units of product B for P12 a unit. It usually sells for P19 a unit with a cost of P15 a unit inclusive of P1.5 a unit as sales commission that will not be paid on this order. The cost also includes P6 in manufacturing overhead, 2/3 of which is a common overhead allocation. Assuming the excess capacity is available and this order requires a mold that costs P150. What is the increase(decrease) in profit for this special order?
Ross has received a special order for 16,000 units of its product at a special price of $23. The product normally sells for $31 and has the following manufacturing costs: Per unit Direct materials $ 7 Direct labor 6 Variable manufacturing overhead 3 Fixed manufacturing overhead 10 Unit cost $ 26 Assume that Ross has sufficient capacity to fill the order. If Ross accepts the order, what effect will the order have on the company’s short-term profit? Multiple Choice $48,000 decrease $112,000 increase $80,000 decrease $240,000 increase
Waterloo Co. sells product P-14 at a price of $48 a unit. The per-unit cost data are direct materials $15 direct labour $10, and overheads $12 (75% variable). Waterloo Co. has sufficient capacity to accept a special order for 40,000 units, but at a discount of 25% from the regular price. Selling costs associated with this order would be $3 per unit. Determine whether Waterloo Co. should accept the special

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