The company has received an offer from a Singaporean company to buy 6,000 bird houses at RM28.00 per unit. The new per unit variable selling cost of the additional units will be RM3.00, and RM24,000 of fixed administrative cost will be incurred. The sale would not affect the domestic sales or their cost. Analyse whether Sangkar Biru should accept this offer.

The company has received an offer from a Singaporean company to buy 6,000 bird houses at RM28.00 per unit. The new per unit variable selling cost of the additional units will be RM3.00, and RM24,000 of fixed administrative cost will be incurred. The sale would not affect the domestic sales or their cost. Analyse whether Sangkar Biru should accept this offer.

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 11P: Emerald Island Company is considering building a manufacturing plant in County Kerry. Predicting...

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a. Davao had a potential foreign customer that has offered to buy 1,500 tons at 450 per ton. Assume that all of Davao's costs would bet at the same levels and rates as last year. What net incomr after taxes would Davao make if it took this order and rejected some business from regular customers so as not to exceed capacity? b. Without prejudice to your answers to peevious questions, and assume that Davao plans to market its product in a new territory. Davao estimated that an advertising and promotion program costing 61,500 annually would need to be undertaken for the next two or three years. In addition l, a 25 per ton sales commission over and above the current commission to the sales force in the new territory would be required. How many tons would have to be sold in the new territory to maintain Davao's current after-tax income of 94,500.
Davao has a potential foreign customer that has offered to buy 1,500 tons at P450 per ton. Assume that all of Davao’s costs would be at the same levels and rates as last year. What net income after taxes would Davao make if it took this order and rejected some business from regular customers so as not to exceed capacity? Without prejudice to your answers to previous questions, and assume that Davao plans to market its product in a new territory. Davao estimates that an advertising and promotion program costing P61,500 annually would need to be undertaken for the next two or three years. In addition, a P25 per ton sales commission over and above the current commission to the sales force in the new territory would be required. How many tons would have to be sold in the new territory to maintain Davao’s current after-tax income of P94,500? If the sales volume is estimated to be 2,100 tons in the next year, and if the prices and costs stay at the same levels and amounts next year, the…
Davao has a potential foreign customer that has offered to buy 1,500 tons at P450 per ton. Assume that all of Davao’s costs would be at the same levels and rates as last year. What net income after taxes would Davao make if it took this order and rejected some business from regular customers so as not to exceed capacity? Answer: 221,500 Without prejudice to your answers to previous questions, and assume that Davao plans to market its product in a new territory. Davao estimates that an advertising and promotion program costing P61,500 annually would need to be undertaken for the next two or three years. In addition, a P25 per ton sales commission over and above the current commission to the sales force in the new territory would be required. How many tons would have to be sold in the new territory to maintain Davao’s current after-tax income of P94,500? Answer: 307.5
Davao has a potential foreign customer that has offered to buy 1,500 tons atP450 per ton. Assume that all of Davao’s costs would be at the same levels and rates as last year. What net income after taxes would Davao make if it took this order and rejected some business from regular customers so as not to exceed capacity?
Davao has a potential foreign customer that has offered to buy 1,500 tons at P450 per ton. Assume that all of Davao’s costs would be at the same levels and rates as last year. What net income after taxes would Davao make if it took this order and rejected some business from regular customers so as not to exceed capacity? If the sales volume is estimated to be 2,100 tons in the next year, and if the prices and costs stay at the same levels and amounts next year, the after-tax income that Davao can expect for next year is? Assume that Davao plans to market its product in a new territory. Davao estimates that an advertising and promotion program costing P61,500 annually would need to be undertaken for the next two or three years. In addition, a P25 per ton sales commission over and above the current commission to the sales force in the new territory would be required. How many tons would have to be sold in the new territory to maintain Davao’s current after-tax income of P94,500?
It costs a company 14 of variable and 6 of fixed cost to produce a product Z200 that sells for 35. A foreign buyer offers to purchase 3,000 units at 22 each. If the special offer is accepted and produced with unused capacity, net profit will be __
Assume the same situation as described in (2) above, except that the company expects to sell 50,000 Rets through regular channels next year. Thus, accepting the U.S. Army’s order would require giving up regular sales of 7,000 Rets. Given this new information, what is the financial advantage (disadvantage) of accepting the U.S. Army's special order?
Assume again that Andretti Company has sufficient capacity to produce 123,200 Daks each year. A customer in a foreign market wants to purchase 35,200 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $2.70 per unit and an additional $28,160 for permits and licenses. The only selling costs that would be associated with the order would be $1.60 per unit shipping cost. What is the break-even price per unit on this order? (Round your answers to 2 decimal places.)
1.Davao has a potential foreign customer that has offered to buy 1,500 tons at P450 per ton. Assume that all of Davao’s costs would be at the same levels and rates as last year. What net income after taxes would Davao make if it took this order and rejected some business from regular customers so as not to exceed capacity? 2. If the sales volume is estimated to be 2,100 tons in the next year, and if the prices and costs stay at the same levels and amounts next year, the after-tax income that Davao can expect for next year is ? 3. The breakeven volume in tons of product for the year is ?
The pipes and plastic company manufactures wiring tools. The company is currently producing well below its full capacity. An Accra based company has approached pipes and plastics limited with an offer to buy 10,000 tools at ghc 1.75 each. Pipes and plastic limited sells its tools wholesale for ghc 1.85each; the average cost per unit is gh1.83 of which ghc 0.27 is fixed costs. If pipes and plastics were to accept the Accra based company's offer, what will be the increase in pipes and plastic operating profit?
Markson had the following results of operations for the past year (shown in picture). A foreign company whose sales will not affect Markson's market offers to buy 2000 units at $14 per unit. In addition to existing costs, selling these units would increase fixed overhead by $1,600 for the purchase of special tools. Markson's annual productive capacity is 12,000 units. If Markson accepts this additional business, it's profits will?
If the offer is accepted with unused capacity, fixed costs will not increase. The amount of the sales price above variable costs will contribute to covering fixed costs. The firm will have $22400 [4000 units X ($23.6 - $18)] more than if it does not accept the offer. Thus, net income will increase by $22400. It costs Sunland Company $18 of variable costs and $8 of fixed costs to produce its product that sells for $36. Wildhorse Company, a foreign buyer, offers to purchase 4000 units at $23.6 each. If the special offer is accepted and produced with unused capacity, net income will: increase $16000. increase $22400. decrease $11200. increase $11200.