Vishnu Problem: Module 6 Textbook Problem 3Learning Objective: 6-2 Make appropriate special order decisionsRundle Company manufactures a personal computer designed for use in schools and markets it under its own label. Rundle has thecapacity to produce 31,000 units a year but is currently producing and selling only 19,000 units a' year. The computer's normal sellingprice is $1,610 per unit with no volume discounts. The unit-level costs of the computer's production are $570 for direct materials, $250for direct labor, and $130 for indirect unit-level manufacturing costs. The total product- and facility-level costs incurred by Rundleduring the year are expected to be $2,290,000 and $800,000, respectively. Assume that Rundle receives a special order to produceand sell 3,070 computers at $1,200 each.RequiredCalculate the contribution to profit from the special order. Should Rundle accept or reject the special order?Contribution to profitShould Rundle accept or reject the special order? Accept

Contribution to profit from special order = Revenue from special order - Relevant cost of special…

Answered: Rundle Company manufactures a personal…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter5: Inventories And Cost Of Goods Sold

Section: Chapter Questions

Problem 5.5DC

See similar textbooks

Similar questions

Chap. 3 Homework Assignment i Saved Help Save & Exit Submit Check my work 5 ! Required information Part 2 of 2 [The following information applies to the questions displayed below.] Warner Clothing is considering the introduction of a new baseball cap for sales by local vendors. The company has collected the following price and cost characteristics. 1.66 points Sales price 15 per unit 3 per unit 42,000 per month Skipped 2$ Variable costs Fixed costs еВook Assume that the company plans to sell 5,000 units per month. Consider requirements (b), (c), and (d) independently of each other. Print Required: a. What will be the operating profit? b. What is the impact on operating profit if the sales price decreases by 10 percent? Increases by 20 percent? c. What is the impact on operating profit if variable costs per unit decrease by 10 percent? Increase by 20 percent? d. Suppose that fixed costs for the year are 10 percent lower than projected, and variable costs per unit are 10 percent higher…
Problem: Module 6 Textbook Problem 6 Learning Objective: 6-3 Make appropriate outsourcing decisions Perez Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9.200 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs Allocated facility-level costs $5,400 6,800 4,100 9,600 27,900 "One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Perez for $2.80 each.. Required a. Calculate the total relevant cost. Should Perez continue to make the containers? b. Perez could lease the space it currently uses in the manufacturing process. If leasing would produce $11,700 per month, calculate the total avoidable costs. Should Perez continue to make the containers? a Total relevant cost Should Perez continue to make the containers? b. Total avoidable cost Should Perez continue to make the…
Question 4 of 9 - /0.75 !! View Policies Current Attempt in Progress Ivanhoe's Candles will be producing a new line of dripless candles in the coming years and has the choice of producing the candles in a large factory with a small number of workers or a small factory with a large number of workers. Each candle will be sold for $10. If the large factory is chosen, the cost per unit to produce each candle will be $3.00. The cost per unit will be $7.50 in the small actory. The large factory would have fixed cash costs of $1.8 million and a depreciation expense of $300,000 per year, while those expenses would be $490,000 and $100,000, respectively in the small factory. Calculate the accounting operating profit break-even point for both factory choices for Ivanhoe's Candles. (Round answers to nearest whole units, e.g. 152.) The accounting break-even point for large factory is units and for small factory is eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer APR tv
Homework, Chapter 25 Make-or-Buy Decision Somerset Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $24 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 40% of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows: Direct materials $8.00 Direct labor 12.00 Factory overhead (40% of direct labor) 4.80 Total cost per unit $24.80 If Somerset Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be 25% of the direct labor costs. a. Prepare a differential analysis dated April 30 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the carrying case. If an amount is zero, enter "0". If required, round your answers to two decimal places. Differential Analysis Make…
2: Homework Question 5 of 9 - / 1 View Policies Current Attempt in Progress Cullumber's Candles will be producing a new line of dripless candles in the coming years and has the choice of producing the candles in a large factory with a small number of workers or a small factory with a large number of workers. Each candle will be sold for $10. If the large factory is chosen, the cost per unit to produce each candle will be $3.60. The cost per unit will be $7.50 in the small factory. The large factory would have fixed cash costs of $2.30 million and a depreciation expense of $300,000 per year, while those expenses would be $470,000 and $100,000, respectively, in the small factory. Calculate the pretax operating cash flow break-even point for both factory choices for Cullumber's Candles. (Round answers to nearest whole units e.g. 152.) retax operating cash flow breakeven point for the large factory is units and for the small factory is eTextbook and Media Save for Later Attempts: 0 of 3…
Problem: Module 6 Textbook Problem 6 Learning Objective: 6-3 Make appropriate outsourcing decisions Benson Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,400 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level costs $ 6,600 6,300 4,000 9,900 26,400 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Benson for $2.80 each. Required a. Calculate the total relevant cost. Should Benson continue to make the containers? b. Benson could lease the space it currently uses in the manufacturing process. If leasing would produce $12,400 per month, calculate the total avoidable costs. Should Benson continue to make the containers? a. Total relevant cost Should Benson continue to make the containers? b. Total avoidable cost Should Benson continue to…
Question 5 Doug Brauer, the supplier of subassembly offers the following discounts schedule for its 4' x 8" sheets of quality plywood. ORDER UNIT COST 9 sheets or less $18.00 10 to 50 sheets $17.50 More than 50 sheets $17.25 Doug Brauer purchases plywood with an ordering cost of $45. The carrying cost is 20%, and the annual demand is 100 sheets. What do you recommend?
Question 8 XAE-2 company is reviewing the behavior of its various activities. XAD is considering various costs. The company manufactures two models of computers. The laptop computer (model MX10) is a top of the line, deluxe model. The tower computer (model DX 20) is the regular model. The following activity data is provided: Not yet answered Marked out of - 1.00 P Flag question Activity Usage Measures Model MX10 Model DX20 Total Units produced annually 15,000 40,000 55,000 Prime costs $40,000 $100,000 $140,000 Machine hours 40,000 60,000 100,000 Production runs 14 20 Direct labor hours 20,000 30,000 50,000 The company primarily has thr.ee major activities as follows in the production process: Activity Activity Cost Setups $50,000 Inspections $30,000 Power $15,000 Calculate the unit cost of model DX 20. O a. $4.05 35°C Rair O Type here to search
Problem 1 Young Siding Co. produces computers, which sell for $400 each. A foreign distribution wants to order 1,000 computers at $300 each. Production costs per unit at capacity of 30,000 units are: Direct materials $90 Direct labor 120 Variable overhead 50 Fixed overhead 60 Required A. How much is the relevant cost of producing one more computer? B. What is the effect on profit of accepting the special order?
7:55 A 18 KB/s Problem: Module 6 Textbook Problem 6 Learning Objective: 6-3 Make appropriate outsourcing decisions Walton Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,100 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level costs $ 5,400 6,600 3,200 10,800 28,300 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Walton for $2.90 each. Required a. Calculate the total relevant cost. Should Walton continue to make the containers? b. Walton could lease the space it currently uses in the manufacturing process. If leasing would produce $11,600 per month, calculate the total avoidable costs. Should Walton continue to make the containers? a. Total relevant cost Should Walton continue to make the containers? b. Total avoidable cost Should…
Question 1 LUMU has demand for 1400 water pumps each year. The cost of a water pump to LUMU is $400. Inventory carrying cost is estimated to be 20% of the unit cost and the ordering cost is $25 per order. If the owner orders in quantities of 300 or more, he can get a 5% discount on the pumps, Should LUMU accepts the quantity discount?
eBook Show Me How Print Item Question Content Area Syntech makes digital cameras for drones. Their basic digital camera uses $80 in variable costs and requires $1,500 per month in fixed costs. Syntech sells 100 cameras per month. If they process the camera further to enhance its functionality, it will require an additional $50 per unit of variable costs, plus an increase in fixed costs of $1,000 per month. The current price of the camera is $170. The marketing manager is positive that they can sell more and charge a higher price for the improved version. At what price level would the upgraded camera begin to improve operational earnings? Price to be charged $???

SEE MORE QUESTIONS

Recommended textbooks for you

Financial Accounting: The Impact on Decision Make…

Accounting

ISBN:

9781305654174

Author:

Gary A. Porter, Curtis L. Norton

Publisher:

Cengage Learning