EBK MANAGERIAL ACCOUNTING
5th Edition
ISBN: 8220103613811
Author: TIETZ
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 8, Problem 8.49AP
Special order decision and considerations (Learning Objective 3)
Coastal Safety manufactures flotation vests in Miami, Florida. Coastal Safety’s contribution margin income statement for the most recent month contains the following data:
8.3-31 Full Alternative Text
Suppose Dazzle Cruiselines wants to buy 4,600 vests from Coastal Safety. Acceptance of the order will not require any variable selling and administrative expenses. The special order will not affect fixed expenses. The Coastal Safety plant has enough unused capacity to manufacture the additional vests. Dazzle Cruiselines has offered $7 per vest, which is below the normal sale price of $15.
Requirements
- 1. Prepare an incremental analysis to determine whether Coastal Safety should accept this special sales order.
- 2. Identify long-term factors that Coastal Safety should consider in deciding whether to accept the special sales order.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
GRAPHICAL METHOD: A school is preparing a trip for 400 students. The
company who is providing the transportation has 10 buses of 50 seats
each and 8 buses of 40 seats, but only has 9 drivers available. The rental
cost for a large bus is $800 and $600 for the small bus. Calculate how
many buses of each type should be used for the trip for the least possible
cost. Attach the PDF or JPEG file of the solution made. *
Your friend, Suzie Whitson, has designed a new type of outdoor toy that helps children learn basic concepts such as colors, numbers, and shapes. Suzie’s product will target two groups: day care centers in warm climates and home school programs. Her company is Jiffy Jet and costs for last month follow:
Factory rent
$
3,050
Company advertising
1,170
Wages paid to assembly workers
31,200
Depreciation for salespersons’ vehicles
2,100
Screws
510
Utilities for factory
825
Assembly supervisor’s salary
3,520
Sandpaper
160
President’s salary
5,040
Plastic tubing
4,090
Paint
240
Sales commissions
1,240
Factory insurance
1,150
Depreciation on cutting machines
2,140
Wages paid to painters
7,900
Assume that Suzie Whitson has decided to begin production of her outdoor children’s toy.
Required:1 and 2. Identify each of the preceding costs as either a product or a period cost. If the cost is a product cost, decide whether it…
BE5.7 - Using Excel to Determine Profitability Given a Constrained Resource
Student Work Area
PROBLEM
Required: Provide input into cells shaded in yellow in this template. Input the required mathematical formulas or functions with cell references to the Problem area or work area as indicated.
Rachel wants to use her knitting skills to make a little extra money so she can enjoy a theatre weekend with her besties. She’s got the pattern down for a hat, scarf, and mittens, but she realizes that her available time is limited. She should be able to sell as many of any item as she can make, but she wants to make sure she’s making the best use of her time. Cost and time information are provided here.
Calculate the contribution margin per unit of the scarce resource for each item.
Hat
Scarf
Mittens
Hat
Scarf
Mittens
Contribution margin per
Time in minutes
20
30…
Chapter 8 Solutions
EBK MANAGERIAL ACCOUNTING
Ch. 8 - Prob. 1QCCh. 8 - (Learning Objective 1) Keys to making short-term...Ch. 8 - (Learning Objective 2) Which is true of...Ch. 8 - (Learning Objective 3) Which of the following...Ch. 8 - Prob. 5QCCh. 8 - Prob. 6QCCh. 8 - (Learning Objective 4) A segment margin is the a....Ch. 8 - (Learning Objective 5) When resources are...Ch. 8 - (Learning Objective 6) Which of the following is...Ch. 8 - Prob. 10QC
Ch. 8 - Determine relevance of information (Learning...Ch. 8 - Prob. 8.2SECh. 8 - Prob. 8.3SECh. 8 - Prob. 8.4SECh. 8 - Prob. 8.5SECh. 8 - Prob. 8.6SECh. 8 - Prob. 8.7SECh. 8 - Prob. 8.8SECh. 8 - Product mix decision: Unlimited demand (Learning...Ch. 8 - Prob. 8.10SECh. 8 - Outsourcing production decision (Learning...Ch. 8 - Relevant information for outsourcing delivery...Ch. 8 - Prob. 8.13SECh. 8 - Prob. 8.14SECh. 8 - Prob. 8.15SECh. 8 - Determine relevant and irrelevant information...Ch. 8 - SUSTAINABILITY ES-17A Sustainability and...Ch. 8 - Prob. 8.18AECh. 8 - Prob. 8.19AECh. 8 - Analyze special order decision (Learning Objective...Ch. 8 - Prob. 8.21AECh. 8 - Prob. 8.22AECh. 8 - Prob. 8.23AECh. 8 - Discontinuing a product line (Learning Objective...Ch. 8 - Prob. 8.25AECh. 8 - Determine product mix for retailertwo stocking...Ch. 8 - Prob. 8.27AECh. 8 - Make-or-buy product component (Learning Objective...Ch. 8 - Prob. 8.29AECh. 8 - Prob. 8.30AECh. 8 - Prob. 8.31AECh. 8 - Prob. 8.32BECh. 8 - Prob. 8.33BECh. 8 - Prob. 8.34BECh. 8 - Prob. 8.35BECh. 8 - Prob. 8.36BECh. 8 - Prob. 8.37BECh. 8 - Prob. 8.38BECh. 8 - Prob. 8.39BECh. 8 - Prob. 8.40BECh. 8 - Identify constraint, then determine product mix...Ch. 8 - Determine product mix for retailertwo stocking...Ch. 8 - Prob. 8.43BECh. 8 - Prob. 8.44BECh. 8 - Prob. 8.45BECh. 8 - Determine maximum outsourcing price (Learning...Ch. 8 - Prob. 8.47BECh. 8 - Prob. 8.48APCh. 8 - Special order decision and considerations...Ch. 8 - Prepare and use contribution margin statements for...Ch. 8 - Product mix decision under constraint (Learning...Ch. 8 - Outsourcing decision given alternative use of...Ch. 8 - Prob. 8.53APCh. 8 - Prob. 8.54BPCh. 8 - Prob. 8.55BPCh. 8 - Prepare and use contribution margin statements for...Ch. 8 - Prob. 8.57BPCh. 8 - Prob. 8.58BPCh. 8 - Prob. 8.59BPCh. 8 - Decide whether to discontinue a department...Ch. 8 - Prob. 8.61ACTCh. 8 - Outsourcing Decision at a Real Company Go to the...Ch. 8 - Prob. 8.63ACTCh. 8 - Prob. 8.64ACT
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Ethical Behavior Consider the following scenario between Dave, a printer, and Steve, an assistant in the local universitys athletic department. Steve: Dave, our department needs to have 10,000 posters printed for the basketball team for next year. Heres the mock-up, and well need them in a month. How much will you charge? Dave: Well, given the costs I have for ink and paper, 1 can come in at around 5,000. Steve: Great, heres what I want you to do. Print me up an invoice for 7,500. Huts our budget. Then, when they pay you, you give me a check for 2,500. Ill make sure that you get the job. Required: CONCEPTUAL CONNECTION Is Steves proposal ethical? What should Dave do?arrow_forwardLearning curve, cumulative average-time learning model. Northern Defense manufactures radar systems. It has just completed the manufacture of its first newly designed system, RS-32. Manufacturing data for the RS-32 follow: Calculate the total variable costs of producing 2, 4, and 8 units.arrow_forwardValencia Manufacturing Company manufactures and sells musical gadgets. You have justbegun your summer internship at Valencia Manufacturing. To expand sales, the business isconsidering paying a commission to its sales team. You have been asked to compute 1) thenew break-even sales figure, and 2) the operating profit if sales increase by 10% under thenew sales commission plan. She is confident that you can handle the task, because youlearned CVP analysis in your accounting class.The following data was obtained:Selling price per unit $200Variable expenses per unit: Direct Material $40Direct Labour $32Variable Manufacturing Overhead $18Fixed expenses: Fixed Manufacturing Overhead $190,000Fixed Selling Costs $115,000Fixed Administrative Costs $135,000Production/Sales 6,000 UnitsAfter collecting your data, you performed your analysis and submitted a memo to yourmanager, who was very pleased with the work done. Your report indicated that the new salescommission plan would result in a…arrow_forward
- Valencia Manufacturing Company manufactures and sells musical gadgets. You have just begun your summer internship at Valencia Manufacturing. To expand sales, the business is considering paying a commission to its sales team. You have been asked to compute 1) the new break-even sales figure, and 2) the operating profit if sales increase by 10% under the new sales commission plan. She is confident that you can handle the task, because you learned CVP analysis in your accounting class.The following data was obtained:Selling price per unit $200 Variable expenses per unit: Direct Material $40Fixed expenses:Production/SalesDirect Labour $32 Variable Manufacturing Overhead $18Fixed Manufacturing Overhead Fixed Selling CostsFixed Administrative Costs$190,000 $115,000 $135,0006,000 Units Find the break-even in sales find the operating profit before and after the fixed cost adjustmentsarrow_forwardEA1. Garrison Boutique, a small novelty store, just spent $4,000 on a new software program that will help in organizing its inventory. Due to the steep learning curve required to use the new software, Garrison must decide between hiring two part-time college students or one full-time employee. Each college student would work 20 hours per week and would earn $15 per hour. The full-time employee would work 40 hours per week and would earn $15 per hour plus the equivalent of $2 per hour in benefits. Employees are given two polo shirts to wear as their uniform. The polo-shirts cost Garrison $10 each. What are the opportunity costs for Garrison?arrow_forwardValencia Manufacturing Company manufactures and sells musical gadgets. You have just begun your summer internship at Valencia Manufacturing. To expand sales, the business is considering paying a commission to its sales team. You have been asked to compute 1) the new break-even sales figure, and 2) the operating profit if sales increase by 10% under the new sales commission plan. She is confident that you can handle the task, because you learned CVP analysis in your accounting class. The following data was obtained: Selling price per unit Variable expenses per unit: $200 $40 $32 $18 Direct Material Direct Labour Variable Manufacturing Overhead Fixed expenses: Fixed Manufacturing Overhead Fixed Selling Costs Fixed Administrative Costs $190,000 $115,000 $135,000 6,000 Units Production/Sales After collecting your data, you performed your analysis and submitted a memo to your manager, who was very pleased with the work done, Your report indicated that the new sales commission plan would…arrow_forward
- Please answer questions 4 and 5 in their entirety. There is an image included to reflect my exact needs and terminology. Please do not deviate. Neptune Company has developed a small inflatable toy that it is anxious to introduce to its customers. The company’s Marketing Department estimates that demand for the new toy will range between 20,000 units and 30,000 units per month. The new toy will sell for $9.00 per unit. Enough capacity exists in the company’s plant to produce 25,000 units of the toy each month. Variable expenses to manufacture and sell one unit would be $5.00 , and incremental fixed expenses associated with the toy would total $34,000 per month. Neptune has also identified an outside supplier who could produce the toy for a price of $4.00 per unit plus a fixed fee of $67,000 per month for any production volume up to 25,000 units. For a production volume between 25,001 and 55,000 units the fixed fee would increase to a total of $134,000 per month. Required: 1.…arrow_forwardYou have just begun your summer internship at Omni Instruments. The company supplies sterilized surgical instruments for physicians. To expand sales, Omni is considering paying a commission to its sales force. The controller, Matthew Barnhill, asks you to compute: (1) the new breakeven sales figure, and (2) the operating profit if sales increase 15% under the new sales commission plan. He thinks you can handle this task because you learned CVP analysis in your accounting class. You spend the next day collecting information from the accounting records, performing the analysis, and writing a memo to explain the results. The company president is pleased with your memo. You report that the new sales commission plan will lead to a significant increase in operating income and only a small increase in breakeven sales. The following week, you realize that you made an error in the CVP analysis. You overlooked the sales personnel’s $2,800 monthly salaries, and you did not include this fixed…arrow_forwardTechPro offers instructional courses in e-commerce website design. The company holds classes in a buildingthat it owns. Classify each of TechPro’s costs below as (a) variable (V) or fixed (F) and (b) direct (D)or indirect (I). Assume the cost object is an individual class.1. Depreciation on classroom building2. Monthly Internet connection cost3. Instructional manuals for students4. Travel expenses for salesperson5. Depreciation on computers used for classes6. Instructor wage (per class)arrow_forward
- Elmwood Pinecone sells fake Christmas trees with a selling price of $75 and variable costs per unit of $30. The company’s monthly fixed expenses are $22,500. NOTE: You may want to use one of the EXCEL spreadsheets I provided in the module - Chapter03 CM Income Statement.xlsx downloador Chapter03 CM Income Statement BE.xlsx download - to help complete this problem. The following names are to be considered when completing this problem: Operating Income Variable Costs Sales Fixed Costs per Unit Selling Price per Unit Variable Cost per Unit Contribution Margin Fixed Costs Operating Loss What is the Elmwood’s break-even point in units? . Use commas as needed (i.e. 1,234). What is the Elmwood’s break-even point in dollars? . Rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). Using the names listed above, construct a contribution margin income statement for the month of November when they will sell 900 units. Rounded to whole dollars and…arrow_forwardValencia Manufacturing Company manufactures and sels musical gadgets. You have just begun your summer intermship at Valencia Manufacturing. To expand sales, the business is considering paying a commission to its sales team. You have been asked to compute 1) the new break-even sales figure, and 2) the operating profit if sales increase by 10% under the new sales commission plan. She is confident that you can handle the task, because you learned CVP analysis in your accounting class. The following data was obtained: Selling price per unit Variable expenses per unit: $200 $40 $32 $18 Direct Material Direct Labour Variable Manufacturing Overhead Fixed expenses: Fixed Manufacturing Overhead Fixed Selling Costs Fixed Administrative Costs $190,000 $115,000 $135,000 6,000 Units Production/Sales After collecting your data, you performed your analysis and submitted a memo to your manager, who was very pleased with the work done. Your report indicated that the new sales commission plan would…arrow_forwardValencia Manufacturing Company manufactures and sells musical gadgets. You have just begun yoursummer internship at Valencia Manufacturing. To expand sales, the business is considering paying acommission to its sales team. You have been asked to compute 1) the new break-even sales figure, and 2) theoperating profit if sales increase by 10% under the new sales commission plan. She is confident that you canhandle the task, because you learned CVP analysis in your accounting class.The following data was obtained:Selling price per unit $200Variable expenses per unit: Direct Material $40Direct Labour $32Variable Manufacturing Overhead $18Fixed expenses: Fixed Manufacturing Overhead $190,000Fixed Selling Costs $115,000Fixed Administrative Costs $135,000Production/Sales 6,000 UnitsAfter collecting your data, you performed your analysis and submitted a memo to your manager, who was verypleased with the work done. Your report indicated that the new sales commission plan would result in…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Essentials of Business Analytics (MindTap Course ...StatisticsISBN:9781305627734Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. AndersonPublisher:Cengage Learning
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Excel Applications for Accounting PrinciplesAccountingISBN:9781111581565Author:Gaylord N. SmithPublisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
Essentials of Business Analytics (MindTap Course ...
Statistics
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning
Inspection and Quality control in Manufacturing. What is quality inspection?; Author: Educationleaves;https://www.youtube.com/watch?v=Ey4MqC7Kp7g;License: Standard youtube license