15. Dauntless Company has an annual plant capacity of 13,000 product units. Predictedoperations for the year are summarized:Sales (10,000 units)Manufacturing costs:fixedVariableSelling and administrative expenses :Fixed$840,000$330,000$64 per unit$90,000Variable (advertising)$10 per unitIf the company accepts a special order from a customer for 1,000 units at a selling price of$78, there will be no effect at all on regular sales at regular prices. No advertising expensewill be required for the special order, but a special promotion cost of $18,000 will berequired. Compute the total amount of the increase or decrease in the company's budgetedoperating income that would be caused by the acceptance of this order.a. increase of 4,000b. decrease of 6,000c. decrease of 4,000d. increase of 6,000e. None of the above

In accounting and finance, incremental analysis is a useful decision-making method that involves…

Answered: 15. Dauntless Company has an annual…

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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The following information is available for YOY Company: Fixed costs per annum (incurred uniformly) P 180,000 Selling price per unit P 15 Variable costs per unit 12 If the company will shutdown operations for one month, 40% of the fixed costs can be avoided but additional costs of P 1,500 will be incurred when the company resumes operations. What is the shutdown point (in units) for one month? P 1,500 P 2,000 P 2,500 P 3,000
[The following information applies to the questions displayed below.] Burchard Company sold 40,000 units of its only product for $17.00 per unit this year. Manufacturing and selling the product required $310,000 of fixed costs. Its per unit variable costs follow. Direct materials Direct labor Variable overhead costs i Variable selling and administrative costs $4.50 3.50 0.45 0.25 For the next year, management will use a new material, which will reduce direct materials costs to $2.25 per unit and reduce direct labor costs to $1.75 per unit. Sales, total fixed costs, variable overhead costs per unit, and variable selling and administrative costs per unit will not change. Management is also considering raising its selling price to $20.40 per unit, which would decrease unit sales volume to 38,000 units. Problem 21-5A (Algo) Part 1. Required: 1. Compute the contribution margin per unit from (a) using the new material and (b) using the new material and increasing the selling price. (Round…
Flying Cloud Co. has the following operating data for its manufacturing operations: Unit selling price $239 Unit variable cost $108 Total fixed costs $842,000 The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%. Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%. If sales prices are held constant, the next break-even point for Flying Cloud Co. will be Oa. increased by 858 units Ob, decreased by 858 units Oc. increased by 686 units Od. increased by 1,029 units
Farrow Company reports the following annual results. Contribution Margin Income Statement Sales (460,000 units) Variable costs Direct materials Direct labor Overhead Contribution margin Fixed costs Fixed overhead Fixed general and administrative Income (a) Compute the income or loss for the special offer. (b) Should the company accept or reject the special offer? Required A Required B Per Unit $15.00 The company receives a special offer for 46,000 units at $13 per unit. The additional sales would not affect its normal sales. Variable costs per unit would be the same for the special offer as they are for the normal units. The special offer would require incremental fixed overhead of $184,000 and incremental fixed general and administrative costs of $198,000. SPECIAL OFFER ANALYSIS Contribution margin Income (loss) 2.00 4.00 2.50 6.50 2.00 1.50 $ 3.00 Complete this question by entering your answers in the tabs below. Required A Annual Total $ 6,900,000 Compute the income or loss for the…
Subject:- Account
21. Empresas Tu Pan produces and sells 1,000,000 pounds of bread monthly. Its variable costs are $ 0.50, this includes $ 0.10 of commissions to sellers. Other variable administrative costs total $ 0.15. Your fixed costs per unit produced are $ 0.25 per month and $ 50,000 for administrative expenses per month. The annual fixed cost of this company will be:
7. Nayvicky Company is making plans for the introduction of a new product, which has a target selling price of P5 per unit. The following estimates of manufacturing costs have been derived for 4 million units, to be produced during the first year: Direct material: P6,000,000 Direct labor: P2,000,000 (at P4 per hour) Overhead costs have not yet been estimated, but monthly data on total production and overhead for the past 12 months have been analyzed by using least-squares regression. The major overhead cost driver is direct labor hours, with the following results: Computed values: Fixed overhead cost: P200,000 Coefficient of independent variable: P10 REQUIRED: a. Prepare the company's regression equation (Y = a + bx) to estimate overhead. b. Calculate the projected gross profit at an activity level of 4,300,000 units. c. How can the company evaluate the "quality" of its regression equation?
2. The ABC Company consumes inventory of 67,500 units of components per year. The carrying cost per unit is RO 1.50. The fixed order cost is RO 25 per order. The production planning is 365-day year. a. What is the Economic Order Quantity (EOQ)? Interpret. 219 S b. Calculate and interpret the optimal number of orders to be placed. the ida c. If it takes five days to receive an order from suppliers, at what inventory level should ABC Company place another order.Interpret.
Lamar has the following data: Selling price $ 40 Variable manufacturing cost $ 22 Fixed manufacturing cost $ 165,000 per month Variable selling & administrative costs $ 6 Fixed selling & administrative costs $ 135,000 per month How many units must Lamar produce and sell in order to break-even?
A company has a production capacity of 580 units per month and its fixed cost is P185,000 a month. The variable cost per unit is 0.5% of the fixed cost and each unit can be sold for P2,350. Economy measures are instituted to reduce the fixed cost by 10 percent and the variable cost by 20 percent. Determine the old and the new break even points.
s
Swisher, Incorporated reports the following annual cost data for its single product: Normal production level 30,000 units Direct materials $6.40 per unit Direct labor $3.93 per unit Variable overhead $5.80 per unit Fixed overhead $150,000 in total This product is normally sold for $48 per unit. If Swisher increases its production to 50,000 units, while sales remain at the current 30,000 unit level, by how much would the company's income increase or decrease under variable costing? $60,000 decrease. b. $90,000 decrease. c.There is no change in gross margin. d. $90,000 increase. e. $60,000 increase.

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