a. 100,000 key fobs at $ 2.50 per key fob and commissions cost incurred. b. 200,000 key fobs at $ 2.25 per key fob and no commission cost incurred. c. 300,000 key fobs at $ 3.00 per key fob, commission cost and $ 30,000 of additional fixed product costs incurred.
Special Order Problem
Empresas Santander produces key chains. The variable costs of making each keychain total $ 2.00. Fixed product costs total $ 500,000. The company has the capacity to produce 2,000,000 key chains. 1,800,000 key chains are currently being sold. The variable administrative costs total $ 1.50 per unit, of those $ 0.25 are commissions. The fixed costs for the period total $ 200,000. The key chains sell for $ 7.00. The company received several special orders, if the order is accepted it is understood that they do not affect the regular sales of the product:
a. 100,000 key fobs at $ 2.50 per key fob and commissions cost incurred.
b. 200,000 key fobs at $ 2.25 per key fob and no commission cost incurred.
c. 300,000 key fobs at $ 3.00 per key fob, commission cost and $ 30,000 of additional fixed product costs incurred.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
