1.Don Company currently manufactures and sells 2,000 units of a single product. Thefollowing data are per unit costs for 2,000 units:Direct materialsDirect labourFactory overhead (30% variable)Selling expenses (50% variable)Administrative expenses (10% variable)Total per unit£2,4009601,800900840£6,900Recently, Jon Company approached Don Company about buying 200 units for £5,200each. Currently, the model is sold to dealers for £7,800.Assume there is additional capacity for 100 more units and the company has to reduceregular customer sales by 100 units in order to contract the special order. There areselling expenses on only the sales to the regular customers. What is the net income ifthe special order of 200 units is accepted?a.b.£1,706,600£1,800,000C.£15,860,000£1,460,,000d.2.Bobby Tote Bags Company manufactures three different product lines, Model X,Model Y, and Model Z. Considerable market demand exists for all models. Thefollowing per unit data apply:Model XModel YModel Z

Part 2Explanation:Step 1: Calculate the incremental revenue from the special order. - Currently,…

Answered: 1. Don Company currently manufactures…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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