MANAGERIAL ACCOUNTING FUND. W/CONNECT
5th Edition
ISBN: 9781259688713
Author: Wild
Publisher: MCG
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Textbook Question
Chapter 10, Problem 3E
Goshford Company produces a single product and has capacity to produce 100,000 units per month. Costs produce its current sales of 80,000 units follow. The regular selling price of the product is $100 per unit. Management is approached by a new customer who wants to purchase 20,000 units of the product for $75 per or not unit If the order is accepted, there will be no additional fixed manufacturing overhead, and no additional fixed selling and administrative expenses. The customer is not in the company’s regular selling territory, so there will be a $5 per unit shipping expense in addition to the regular variable selling and administrative expenses.
1. Determining whether management should accept or reject the new business.
2. What nonfinancial factors should management consider when deciding whether to take this order?
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Goshford Company produces a single product and has capacity to produce 100,000 units per month. Costs to produce its current sales of 80,000 units follow. The regular selling price of the product is $100 per unit. Management is approached by a new customer who wants to purchase 20,000 units of the product for $75 per unit. If the order is accepted, there will be no additional fixed manufacturing overhead and no additional fixed selling and administrative expenses. The customer is not in the company’sregular selling territory, so there will be a $5 per unit shipping expense in addition to the regular variable selling and administrative expenses. Determine whether management should accept or reject the new business.
Goshford Company produces a single product and has capacity to produce 100,000 units per month. Costs to produce its current sales of 80,000 units follow. The regular selling price of the product is $100 per unit. Management is approached by a new customer who wants to purchase 20,000 units of the product for $75.00 per unit. If the order is accepted, there will be no additional fixed manufacturing overhead and no additional fixed selling and administrative expenses. The customer is not in the company’s regular selling territory, so there will be a $5.00 per unit shipping expense in addition to the regular variable selling and administrative expenses.
Per Unit
Costs at 80,000 Units
Direct materials
$
12.50
$
1,000,000
Direct labor
15.00
1,200,000
Variable manufacturing overhead
10.00
800,000
Fixed manufacturing overhead
17.50
1,400,000
Variable selling and administrative expenses
14.00
1,120,000
Fixed selling and…
Pardo Company produces a single product and has capacity to produce 140,000 units per month. Costs to produce its current monthly
sales of 112,000 units follow. The normal selling price of the product is $106 per unit. A new customer offers to purchase 28,000 units
for $64.80 per unit. If the special offer is accepted, there will be no additional fixed overhead and no additional fixed general and
administrative costs. The special offer would not affect its normal sales.
Direct materials
Direct labor
Variable overhead
Fixed overhead
Fixed general and administrative
Totals
(a) Compute the income from the special offer.
(b) Should the company accept the special offer?
Required A Required B
SPECIAL OFFER ANALYSIS
Per Unit
$ 12.50
15.00
13.00
Complete this question by entering your answers in the tabs below.
Variable costs
17.50
14.00
$72.00
Contribution margin
Fixed costs
Compute the income for the special offer. (Round your "Per Unit" answers to 2 decimal places.)
Fixed overhead
Fixed…
Chapter 10 Solutions
MANAGERIAL ACCOUNTING FUND. W/CONNECT
Ch. 10 - Prob. 1MCQCh. 10 - Prob. 2MCQCh. 10 - Prob. 3MCQCh. 10 - Prob. 4MCQCh. 10 - Prob. 5MCQCh. 10 - Prob. 1DQCh. 10 - Is nonfinancial information ever useful in...Ch. 10 - What is a relevant cost? Identify the two types of...Ch. 10 - Prob. 4DQCh. 10 - Prob. 5DQ
Ch. 10 - Prob. 6DQCh. 10 - Prob. 7DQCh. 10 - Prob. 8DQCh. 10 - Prob. 9DQCh. 10 - Prob. 10DQCh. 10 - Prob. 1QSCh. 10 - Prob. 2QSCh. 10 - Prob. 3QSCh. 10 - Prob. 4QSCh. 10 - Prob. 5QSCh. 10 - Prob. 6QSCh. 10 - Prob. 7QSCh. 10 - Prob. 8QSCh. 10 - Signal mistakenly produced 1,000 defective cell...Ch. 10 - Prob. 10QSCh. 10 - Prob. 11QSCh. 10 - Prob. 12QSCh. 10 - Prob. 13QSCh. 10 - Prob. 14QSCh. 10 - Rory Company has a machine with a book value of...Ch. 10 - Fill in each of the blanks below with the correct...Ch. 10 - Prob. 2ECh. 10 - Goshford Company produces a single product and has...Ch. 10 - Prob. 4ECh. 10 - Prob. 5ECh. 10 - Prob. 6ECh. 10 - Prob. 7ECh. 10 - Prob. 8ECh. 10 - Prob. 9ECh. 10 - Suresh Co. expects its five departments to yield...Ch. 10 - Exercise 23-11 Sales mix A1 Childress Company...Ch. 10 - Prob. 12ECh. 10 - Prob. 13ECh. 10 - Prob. 1PSACh. 10 - Calla Company produces skateboards that sell for...Ch. 10 - Prob. 3PSACh. 10 - Prob. 4PSACh. 10 - Prob. 5PSACh. 10 - Elegant Decor Companys management is trying to...Ch. 10 - Prob. 1PSBCh. 10 - Prob. 2PSBCh. 10 - Prob. 3PSBCh. 10 - Prob. 4PSBCh. 10 - Prob. 5PSBCh. 10 - Esme Companys management is trying to decide...Ch. 10 - Prob. 10SPCh. 10 - Apple currently chooses to buy (mainly from...Ch. 10 - Prob. 3BTNCh. 10 - Assume that you work for Greebles Department...Ch. 10 - Prob. 5BTNCh. 10 - Prob. 6BTNCh. 10 - Prob. 7BTNCh. 10 - Prob. 8BTNCh. 10 - Prob. 9BTN
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