Homerun Corporation produces baseball bats for kids that it sells for $36 each. At capacity, the company can produce 50,000 bats a year. The costs of producing and selling 50,000 bats are as follows: E (Click to view the costs.) Read the requirements. Requirement 1. Suppose Homerun is currently producing and selling 38,000 bats. At this level $20 each. Homerun will incur no variable selling costs for this special order. Should Homerun accept this one-time special order? Show your calculations. production and sales, its fixed costs are the same as given in the preceding table. Cobb Corporation wants to place a one-time special order for 12,000 bats at Determine the effect on operating income if the order accepted. (Enter decreases in operating income with parentheses or a minus sign.) Data Table Increase (decrease) in operating income if order is accepted Cost per Bat Total Costs Homerun should Cobb's special order because it operating income by $ Direct materials 11 $ 550,000 Direct manufacturing labor 100,000 Variable manufacturing overhead 100,000 Fixed manufacturing overhead 300,000 Variable selling expenses 200,000 250,000 Fixed selling expenses 30 $ 1,500,000 Total costs Print Done

Homerun Corporation produces baseball bats for kids that it sells for $36 each. At capacity, the company can produce 50,000 bats a year. The costs of producing and selling 50,000 bats are as follows: E (Click to view the costs.) Read the requirements. Requirement 1. Suppose Homerun is currently producing and selling 38,000 bats. At this level $20 each. Homerun will incur no variable selling costs for this special order. Should Homerun accept this one-time special order? Show your calculations. production and sales, its fixed costs are the same as given in the preceding table. Cobb Corporation wants to place a one-time special order for 12,000 bats at Determine the effect on operating income if the order accepted. (Enter decreases in operating income with parentheses or a minus sign.) Data Table Increase (decrease) in operating income if order is accepted Cost per Bat Total Costs Homerun should Cobb's special order because it operating income by $ Direct materials 11 $ 550,000 Direct manufacturing labor 100,000 Variable manufacturing overhead 100,000 Fixed manufacturing overhead 300,000 Variable selling expenses 200,000 250,000 Fixed selling expenses 30 $ 1,500,000 Total costs Print Done

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 13P: Deuce Sporting Goods manufactures a high-end model tennis racket. The company’s forecasted income...

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Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all 30,000 for $240 each. Country Enterprises has approached Dimitri to buy 800 chairs for $210 each. Dimitris normal variable cost is $165 per chair, including $50 per unit in direct labor per chair. Dimitri can produce the special order on an overtime shift, which means that direct labor would be paid overtime at 150% of the normal pay rate. The annual fixed costs will be unaffected by the special order and the contract will not disrupt any of Dimitris other operations. What will be the impact on profits of accepting the order?
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