SASA Trading involves in making bottled sauce called kicap. Currently, the company operating below its full capacity. The photos is the financial report for the year of 2021. Additional information: There’s one direct seller offered to purchase 7,000 bottles of kicap at $0.9 per bottle. Due to below selling price and its production cost per unit, the company is unwilling to accept the order. Requirements: a) Determine whether SASA Trading should accept or reject the order. Show the computations. b) Before making decision, discuss the relevant qualitative factors that need to be considered on whether to accept or reject it.
SASA Trading involves in making bottled sauce called kicap. Currently, the company operating below its full capacity. The photos is the financial report for the year of 2021. Additional information: There’s one direct seller offered to purchase 7,000 bottles of kicap at $0.9 per bottle. Due to below selling price and its production cost per unit, the company is unwilling to accept the order. Requirements: a) Determine whether SASA Trading should accept or reject the order. Show the computations. b) Before making decision, discuss the relevant qualitative factors that need to be considered on whether to accept or reject it.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter3: Cost Behavior
Section: Chapter Questions
Problem 26E: Starling Co. manufactures one product with a selling price of 18 and variable cost of 12. Starlings...
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SASA Trading involves in making bottled sauce called kicap. Currently, the company operating below its full capacity. The photos is the financial report for the year of 2021.
Additional information:
There’s one direct seller offered to purchase 7,000 bottles of kicap at $0.9 per bottle. Due to below selling price and its production cost per unit, the company is unwilling to accept the order.
Requirements:
a) Determine whether SASA Trading should accept or reject the order. Show the computations.
b) Before making decision, discuss the relevant qualitative factors that need to be considered on whether to accept or reject it.
Transcribed Image Text:Sales (18,000 bottles)
Variable production cost
Fixed production cost
Total production cost
Selling cost
Total cost
Net profit
10,800
4,500
15,300
4,000
27,000
19,300
7,700
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