answer in text form please (without image) A company currently sells 8,020 basketballs (units) per year for $25 each. The company can make up to 10,020 basketballs per year.Each basketball made includes $15 in variable costs and $6.50 of fixed costs. A new customer offers to buy 605 basketballs for $20each. For this special offer, the incremental fixed costs are $3.80 per ball. No other costs will change if the offer is accepted.a) For this special offer, calculate the income.b) Should the special offer be accepted or rejected?(a) Special offer analysisContribution marginIncome(b) The company shouldPer Unit0.00Total

The contribution Margin is calculated as difference between sales and variable cost. The net income…

Answered: A company currently sells 8,020…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 6MC: Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling...

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Country Diner currently makes cookies for its boxed lunches. It uses 40,000 cookies annually in the production of the boxed lunches. The costs to make the cookies are: A potential supplier has offered to sell Country Diner the cookies for $0.85 each. If the cookies are purchased, 10% of the fixed overhead could be avoided. If Jason accepts the offer, what will the effect on profit be?
Reubens Deli currently makes rolls for deli sandwiches it produces. It uses 30,000 rolls annually in the production of deli sandwiches. The costs to make the rolls are: A potential supplier has offered to sell Reuben the rolls for $0.90 each. If the rolls are purchased, 30% of the fixed overhead could be avoided, If Reuben accepts the offer, what will the effect on profit be?
Deuce Sporting Goods manufactures a high-end model tennis racket. The company’s forecasted income statement for the year, before any special orders, is as follows: Fixed costs included in the forecasted income statement are $400,000 in manufacturing cost of goods sold and $200,000 in selling expenses. A new client placed a special order with Deuce, offering to buy 1,000 tennis rackets for $100.00 each. The company will incur no additional selling expenses if it accepts the special order. Assuming that Deuce has sufficient capacity to manufacture 1,000 more tennis rackets, by what amount would differential income increase (decrease) as a result of accepting the special order? (Hint: First compute the variable cost per unit relevant to this decision.)
Markson and Sons leases a copy machine with terms that include a fixed fee each month plus acharge for each copy made. Markson made 9,000 copies and paid a total of $480 in January. In April, they paid $320 for 5,000 copies. What is the variable cost per copy if Markson uses the high-low method to analyze costs?
Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Cutrate Furniture approached Jansen about buying 1,200 shelves for bookcases it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shell. The $1.50 per-shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320.000. However, the $130 packaging cost will not apply in this case. The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Based on this information, what would be the profit if Jansen accepts the special order? A. Profits will decrease by $1,200. B. Profits will increase by $31,200. C. Profits will increase by $600. D. Profits will increase by $7,200.
Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22 each in the coming year. Total variable costs equal 1,086,800. Total fixed costs equal 8,000,000. (Round all ratios to four significant digits, and round all dollar amounts to the nearest dollar.) Required: 1. What is the contribution margin per unit? What is the contribution margin ratio? 2. Calculate the sales revenue needed to break even. 3. Calculate the sales revenue needed to achieve a target profit of 245,000. 4. What if the average price per unit increased to 23.50? Recalculate: a. Contribution margin per unit b. Contribution margin ratio (rounded to four decimal places) c. Sales revenue needed to break even d. Sales revenue needed to achieve a target profit of 245,000
Shelby Industries has a capacity to produce 45.000 oak shelves per year and is currently selling 40,000 shelves for $32 each. Martin Hardwoods has approached Shelby about buying 1,200 shelves for a new project and is willing to pay $26 each. The shelves can be packaged in bulk; this saves Shelby $1.50 per shelf compared to the normal packaging cost. Shelves have a unit variable cost of $27 with fixed costs of $350,000. Because the shelves dont require packaging, the unit variable costs for the special order will drop from $27 per shelf to $25.50 per shelf. Shelby has enough idle capacity to accept the contract. What is the minimum price per shelf that Shelby should accept for this special order?
Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90. The companys monthly fixed expenses are $180,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of October when they will sell 10,000 units. How many units will Cadre need to sell in order to realize a target profit of $300,000? What dollar sales will Cadre need to generate in order to realize a target profit of $300,000? Construct a contribution margin income statement for the month of August that reflects $2,400,000 in sales revenue for Cadre, Inc.
A company currently sells 8,280 basketballs (units) per year for $25 each. The company can make up to 10,280 basketballs per year. Each basketball made includes $15 In variable costs and $6.50 of fixed costs. A new customer offers to buy 670 basketballs for $20 each. For this special offer, the incremental fixed costs are $3.80 per ball. No other costs will change if the offer is accepted. a) For this special offer, calculate the income. b) Should the special offer be accepted or rejected? (a) Special offer analysis Contribution margin Income (b) The company should $ Per Unit 0.00 Total
Radar Company sells bikes for $490 each. The company currently sells 3.700 bikes per year and could make as many as 5,000 bikes per year. The bikes cost $275 each to make: $160 in variable costs per bike and $115 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 800 bikes for $440 each. Incremental fixed costs to make this order are $47,000. No other costs will change if this order is accepted. Compute Radar's additional income (ignore taxes) if it accepts this order. Contribution margin Incremental Amount per Unit Incremental Fixed Costs Incremental income (loss) from new business The company should Incremental Income from New Business
Radar Company sells bikes for $520 each. The company currently sells 4,300 bikes per year and could make as many as 4,620 bikes per year. The bikes cost $265 each to make: $170 in variable costs per bike and $95 of fixed costs per bike. Radar receives an offer from a potential customer who wants to buy 320 bikes for $500 each. Incremental fixed costs to make this order are $70 per bike. No other costs will change if this order is accepted. (a) Compute the income for the special offer. (b) Should Radar accept this offer? (a) Special offer analysis Per Unit Total Contribution margin Income (b) The company should
Radar Company sells bikes for $530 each. The company currently sells 4,000 bikes per year and could make as many as 4,380 bikes per year. The bikes cost $300 each to make: $185 in variable costs per bike and $115 of fixed costs per bike. Radar receives an offer from a potential customer who wants to buy 380 bikes for $510 each. Incremental fixed costs to make this order are $100 per bike. No other costs will change if this order is accepted.

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