Homework Help is Here – Start Your Trial Now!
Business
Accounting
Alpena Corporation manufactures smartphone and tablet cases. The following is the cost of each unit. $ 7.35 2.95 0.95 11.70 $ 22.95 Materials Labor Variable overhead Fixed overhead ($1,755,000 per year; 150,000 units per year) Total Decatur Devices has approached Alpena with an offer to buy 3,000 cases at a price of $17.80 each for its new specialty tablet designed for health care workers. The regular price of an Alpena case is $26.50. Alpena has the total capacity to produce 180,000 units without increasing its fixed overhead. Decatur Devices requires that each case use its branding, which requires a more expensive embossing step. This will result in an additional $2.85 per case labor cost. The material cost of of the Decatur case will be the same as for the current models. The Decatur order will also require a one-time rental of embossing equipment for $6,549. Required: a. Prepare a schedule to show the impact of filling the Decatur Devices order on Alpena's profits for the year. b. Would you recommend that Alpena accept the order?

Alpena Corporation manufactures smartphone and tablet cases. The following is the cost of each unit. $ 7.35 2.95 0.95 11.70 $ 22.95 Materials Labor Variable overhead Fixed overhead ($1,755,000 per year; 150,000 units per year) Total Decatur Devices has approached Alpena with an offer to buy 3,000 cases at a price of $17.80 each for its new specialty tablet designed for health care workers. The regular price of an Alpena case is $26.50. Alpena has the total capacity to produce 180,000 units without increasing its fixed overhead. Decatur Devices requires that each case use its branding, which requires a more expensive embossing step. This will result in an additional $2.85 per case labor cost. The material cost of of the Decatur case will be the same as for the current models. The Decatur order will also require a one-time rental of embossing equipment for $6,549. Required: a. Prepare a schedule to show the impact of filling the Decatur Devices order on Alpena's profits for the year. b. Would you recommend that Alpena accept the order?

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 26E: Ingles Corporation is a manufacturer of tables sold to schools, restaurants, hotels, and other...
See similar textbooks
icon
Related questions
Question

Please do not give solution in image format thanku 

Alpena Corporation manufactures smartphone and tablet cases. The following is the cost of each unit. Materials Labor Variable overhead Fixed overhead ($1,755,000 per year; 150,000 units per year) Total Decatur Devices has approached Alpena with an offer to buy 3,000 cases at a price of $17.80 each for its new specialty tablet designed for health care workers. The regular price of an Alpena case is $26.50. Alpena has the total capacity to produce 180,000 units without increasing its fixed overhead. Decatur Devices requires that each case use its branding, which requires a more expensive embossing step. This will result in an additional $2.85 per case labor cost. The material cost of of the Decatur case will be the same as for the current models. The Decatur order will also require a one-time rental of embossing equipment for $6,549. Required: a. Prepare a schedule to show the impact of filling the Decatur Devices order on Alpena's profits for the year. b. Would you recommend that Alpena accept the order? c. Considering only profit, determine the minimum quantity of cases in the special order that would make it profitable, assuming capacity is available. Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare a schedule to show the impact of filling the Decatur Devices order on Alpena's profits for the year. (Enter your answers in thousands rounded to 1 decimal place. (i.e., 5,400,400 should be entered as 5,400.4). Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) Sales revenue Less variable costs: Materials Labor Variable overhead Total variable cost Contribution margin Less: Fixed costs Operating profit (loss) Status Quo 150,000 Units $ (All Costs in Thousands of Dollars) Alternative 153,000 Units 0.0 $ 0.0 < Required A $ 7.35 2.95 0.95 11.70 $ 22.95 Difference higher higher higher higher higher higher higher higher Required B >
Transcribed Image Text:Alpena Corporation manufactures smartphone and tablet cases. The following is the cost of each unit. Materials Labor Variable overhead Fixed overhead ($1,755,000 per year; 150,000 units per year) Total Decatur Devices has approached Alpena with an offer to buy 3,000 cases at a price of $17.80 each for its new specialty tablet designed for health care workers. The regular price of an Alpena case is $26.50. Alpena has the total capacity to produce 180,000 units without increasing its fixed overhead. Decatur Devices requires that each case use its branding, which requires a more expensive embossing step. This will result in an additional $2.85 per case labor cost. The material cost of of the Decatur case will be the same as for the current models. The Decatur order will also require a one-time rental of embossing equipment for $6,549. Required: a. Prepare a schedule to show the impact of filling the Decatur Devices order on Alpena's profits for the year. b. Would you recommend that Alpena accept the order? c. Considering only profit, determine the minimum quantity of cases in the special order that would make it profitable, assuming capacity is available. Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare a schedule to show the impact of filling the Decatur Devices order on Alpena's profits for the year. (Enter your answers in thousands rounded to 1 decimal place. (i.e., 5,400,400 should be entered as 5,400.4). Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) Sales revenue Less variable costs: Materials Labor Variable overhead Total variable cost Contribution margin Less: Fixed costs Operating profit (loss) Status Quo 150,000 Units $ (All Costs in Thousands of Dollars) Alternative 153,000 Units 0.0 $ 0.0 < Required A $ 7.35 2.95 0.95 11.70 $ 22.95 Difference higher higher higher higher higher higher higher higher Required B >
Complete this question by entering your answers in the tabs below. Required A Required B Required C Would you recommend that Alpena accept the order? Yes ONO < Required A Required A Complete this question by entering your answers in the tabs below. Required B Required C Required C > Considering only profit, determine the minimum quantity of cases in the special order that would make it profitable, assuming capacity is available. Quantity of cases units < Required B Required C >
Transcribed Image Text:Complete this question by entering your answers in the tabs below. Required A Required B Required C Would you recommend that Alpena accept the order? Yes ONO < Required A Required A Complete this question by entering your answers in the tabs below. Required B Required C Required C > Considering only profit, determine the minimum quantity of cases in the special order that would make it profitable, assuming capacity is available. Quantity of cases units < Required B Required C >
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Relevant cost analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Essentials Of Business Analytics
Essentials Of Business Analytics
Statistics
ISBN:
9781285187273
Author:
Camm, Jeff.
Publisher:
Cengage Learning,
Essentials of Business Analytics (MindTap Course …
Essentials of Business Analytics (MindTap Course …
Statistics
ISBN:
9781305627734
Author:
Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Principles of Cost Accounting
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS