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lazeppa Corporation sells relays at a selling price of $28 per unit. The company's cost per unit, based on full capacity of 160,0 nits, is as follows: Direct materials $ 6 Direct labor Overhead (2/3 of which is variable) lazeppa has been approached by a distributor in Montana offering to buy a special order consisting of 30,000 relays. Mazepp ne capacity to fill the order. However, it will incur an additional shipping cost of $2 for each relay it sells to the distributor.

lazeppa Corporation sells relays at a selling price of $28 per unit. The company's cost per unit, based on full capacity of 160,0 nits, is as follows: Direct materials $ 6 Direct labor Overhead (2/3 of which is variable) lazeppa has been approached by a distributor in Montana offering to buy a special order consisting of 30,000 relays. Mazepp ne capacity to fill the order. However, it will incur an additional shipping cost of $2 for each relay it sells to the distributor.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise 21.12 (Static) Pricing a Special Order (LO21-1, LO21-2, LO21-3) Mazeppa Corporation sells relays at a selling price of $28 per unit. The company's cost per unit, based on full capacity of 160,000 units, is as follows: Direct materials Direct labor Overhead (2/3 of which is variable) $ 6 9. Mazeppa has been approached by a distributor in Montana offering to buy a special order consisting of 30,000 relays. Mazeppa H the capacity to fill the order. However, it will incur an additional shipping cost of $2 for each relay it sells to the distributor. a-1. Assume that Mazeppa is currently operating at a level of 100,000 units. Show the calculation for the unit price to charge the distributor which will generate an increase in operating income of $2 per unit? a-2. What is your interpretation of the changes to the contribution margin per unit and the operating income on account of the uni price charged to the distributor? b-1. Assume that Mazeppa is currently operating at full capacity. Show the calculation for the unit price to charge the distributor wi will generate an increase in operating income of $60,000 more than it would be without accepting the special order? b-2. What is your interpretation of the changes to the contribution margin per unit and the operating income on account of the uni price charged to the distributor? Complete this question by entering your answers in the tabs below. Reg A1 Req A2 Reg B1 Req B2 Assume that Mazeppa is currently operating at a level of 100,000 units. Show the calculation for the unit price to charge the distributor which will generate an increase in operating income of $2 per unit? (Do not round intermediate calculations.) Special Sale Selling price Drev 5. of 5 Next
Transcribed Image Text:Exercise 21.12 (Static) Pricing a Special Order (LO21-1, LO21-2, LO21-3) Mazeppa Corporation sells relays at a selling price of $28 per unit. The company's cost per unit, based on full capacity of 160,000 units, is as follows: Direct materials Direct labor Overhead (2/3 of which is variable) $ 6 9. Mazeppa has been approached by a distributor in Montana offering to buy a special order consisting of 30,000 relays. Mazeppa H the capacity to fill the order. However, it will incur an additional shipping cost of $2 for each relay it sells to the distributor. a-1. Assume that Mazeppa is currently operating at a level of 100,000 units. Show the calculation for the unit price to charge the distributor which will generate an increase in operating income of $2 per unit? a-2. What is your interpretation of the changes to the contribution margin per unit and the operating income on account of the uni price charged to the distributor? b-1. Assume that Mazeppa is currently operating at full capacity. Show the calculation for the unit price to charge the distributor wi will generate an increase in operating income of $60,000 more than it would be without accepting the special order? b-2. What is your interpretation of the changes to the contribution margin per unit and the operating income on account of the uni price charged to the distributor? Complete this question by entering your answers in the tabs below. Reg A1 Req A2 Reg B1 Req B2 Assume that Mazeppa is currently operating at a level of 100,000 units. Show the calculation for the unit price to charge the distributor which will generate an increase in operating income of $2 per unit? (Do not round intermediate calculations.) Special Sale Selling price Drev 5. of 5 Next
a-2. What is your interpretation of the changes to the contribution margin per unit and the operating income or price charged to the distributor? b-1. Assume that Mazeppa is currently operating at full capacity. Show the calculation for the unit price to charg will generate an increase in operating income of $60,000 more than it would be without accepting the special b-2. What is your interpretation of the changes to the contribution margin per unit and the operating income o price charged to the distributor? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B1 Req B2 Assume that Mazeppa is currently operating at a level of 100,000 units. Show the calculation for the unit price to c distributor which will generate an increase in operating income of $2 per unit? (Do not round intermediate calculat Special Sale Selling price Less: Direct materials Direct labor Variable overhead Additional shipping costs Contribution margin per unit Req A2 >
Transcribed Image Text:a-2. What is your interpretation of the changes to the contribution margin per unit and the operating income or price charged to the distributor? b-1. Assume that Mazeppa is currently operating at full capacity. Show the calculation for the unit price to charg will generate an increase in operating income of $60,000 more than it would be without accepting the special b-2. What is your interpretation of the changes to the contribution margin per unit and the operating income o price charged to the distributor? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B1 Req B2 Assume that Mazeppa is currently operating at a level of 100,000 units. Show the calculation for the unit price to c distributor which will generate an increase in operating income of $2 per unit? (Do not round intermediate calculat Special Sale Selling price Less: Direct materials Direct labor Variable overhead Additional shipping costs Contribution margin per unit Req A2 >
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