can you plsss answer this MA2- Relevant CostingProblem 4 (Accept or Reject an Order)As a result of an expansion program, Marianas, Inc., has excess capacity of 40,000 machine hours, whichis expected to be absorbed by the domestic market in a few months.The company has received inquiries from two companies located in another country. One offers to buy12,000 units of Product A at P1.20 per unit; the second offers to buy 13,000 units of Product B at P1.40 perunit. Marianas, Inc. can accept only one of these two offers.The standard cost for these two products is as follows:PRODUCT PRODUCTвP0.700.24AP0.500.20MaterialsLaborFactory overheadTotal standard cost0.40P1.100.56P1.50Factory overhead is applied on a machine-hour basis at P11.20 per hour, 25% factory overhead isestimated to be fixed. No marketing and administrative expenses would be applicable to either order.Transportation charges are to be paid by the buyer,Required: Which order should be accepted?Probiem 5 (Special Order)Kimura Company produces a single product. The costs of producing and selling a single unit of thisproduct at the company's current activity level of 8,000 units per month are:Direct materialsDirect laborVariable manufacturing overheadFixed manufacturing overheadVariable selling and administrative expensesFixed selling and administrative expensesP 2.503.000.504.251.502.00The normal selling price is P15 per unit. The company's capacity is 10,000 units per month. An order hasbeen received from a potential customer overseas for 2,000 units at a price of P12 per unit. This orderwould not affect regular sales.Required:1. If the order is accepted, by how much will monthly profits increase or decrease? (The order wouldnot change the company's total fixed costs.)2. Assume the company has 500 units of this product left over from the last year that are inferior tothe current model. The units must be sold through regular channels at reduced prices. What unitcost is relevant for establishing a minimum selling price for these units? Explain.

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MA2-Relevant Costing Problem 4 (Accept or Reject an Order) As a result of an expansion program, Marianas, Inc., has excess capacity of 40,000 machine hours, which is expected to be absorbed by the domestic market in a few months. The company has received inquiries from two companies located in another country. One offers to buy 12,000 units of Product A at P1.20 per unit; the second offers to buy 13,000 units of Product B at P1.40 per unit. Marianas, Inc. can accept only one of these two offers. The standard cost for these two products is as follows: PRODUCT PRODUCT P 0.50 0.20 P0.70 0.24 0.56 P 1.50 Materials Labor Factory overhead Total standard cost 0.40 P1.10 Factory overhead is applied on a machine-hour basis at P11.20 per hour, 25% factory overhead is estimated to be fixed. No marketing and administrative expenses would be applicable to either order. Transportation charges are to be paid by the buyer, Required: Which order should be accepted?

MA2-Relevant Costing Problem 4 (Accept or Reject an Order) As a result of an expansion program, Marianas, Inc., has excess capacity of 40,000 machine hours, which is expected to be absorbed by the domestic market in a few months. The company has received inquiries from two companies located in another country. One offers to buy 12,000 units of Product A at P1.20 per unit; the second offers to buy 13,000 units of Product B at P1.40 per unit. Marianas, Inc. can accept only one of these two offers. The standard cost for these two products is as follows: PRODUCT PRODUCT P 0.50 0.20 P0.70 0.24 0.56 P 1.50 Materials Labor Factory overhead Total standard cost 0.40 P1.10 Factory overhead is applied on a machine-hour basis at P11.20 per hour, 25% factory overhead is estimated to be fixed. No marketing and administrative expenses would be applicable to either order. Transportation charges are to be paid by the buyer, Required: Which order should be accepted?

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 14E: Accepting business at a special price Box Elder Power Company expects to operate at 85% of...

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