At Pharoah Electronics, it costs $33 per unit ($19 variable and $14 fixed) to make an MP3 player that normally sells for $55. A foreignwholesaler offers to buy 3,750 units at $28 each. Pharoah Electronics will incur special shipping costs of $1 per unit. Assuming thatPharoah Electronics has excess operating capacity, indicate the net income (loss) Pharoah Electronics would realize by accepting thespecial order. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)RevenuesCosts-Variable manufacturingShippingNet incomeThe special order should beLA$RejectOrderLA$tAAcceptOrderLA$$Net IncomeIncrease (Decrease)

Fixed cost in total remains constant. So it is not relevant in decision making process. Variable…

Answered: At Pharoah Electronics, it costs $33…

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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Similar questions

Ignore income taxes for this problem. A firm currently sells 25 units for $12 each. Its variable cost per unit is $9 and fixed costs total $60. The firm determines it can sell 35 units if it decreases the selling price from $12 to $11 per unit. The firm should Select one: a. Decrease the sales price because it will increase profits by $5. b. Not decrease the sales price because it will decrease profits by $10. c. Not decrease the sales price because it will decrease profits by $5. d. Decrease the sales price because it will increase profits by $10.
You are an exporter from Indonesia and have to fill the quotation for 2 Tons of Cassava. Based on the quotation, the importer is in Korea. Assume that the unit price is $5 per kg. You have to take the decision on the amount to be quoted. How is your quotation affected by Incoterm?Quote Price includes Additional Cost ($)EXW Ex works 400FCA Free carrier 100FAS Free alongside ship 300FOB Free on board 150CFR Cost and freight 550CIF Cost, insurance and freight 100DEQ Delivered ex quay 100DDP Delivery duty paid 700 a. How much does the exporter have to pay as sea freight charges from Indonesia to Korea?b. What would be the total price to be quoted to the importer, if the marine insurance cost is $75 to port in Korea?
Night Shades Inc. (NSI) manufacturers biotech sunglasses. These sunglasses sell for $150 each, and cost $70 each to produce. Night Shades Inc. has fixed costs of $100,000.a. Calculate Night Shades' Breakeven point.b. how much profit (loss) will Night Shades have if it sells 500 sunglasses? 4,000 sunglasses?c. Night Shades' manager expects an operation profit of $200,000. How many sunglasses must be sold to attain this profit?
Current Attempt in Progress Your answer is partially correct. Cullumber Company incurs a cost of $35 per unit, of which $19 is variable, to make a product that normally sells for $58. A foreign wholesaler offers to buy 5,600 units at $30 each. Cullumber will incur additional costs of $1 per unit to imprint a logo and to pay for shipping. Compute the increase or decrease in net income Cullumber will realize by accepting the special order, assuming Cullumber has sufficient excess operating capacity. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Revenues Costs $ Net income $ Reject $ $ Should Cullumber Company accept the special order? Cullumber company should accept V the special order. Accept 168000 112000 i 56000 $ $ Net Income Increase (Decrease) 168000 112000 56000
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 46,000 Rets per year. Costs associated with this level of production and sales are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expense Fixed selling expense Total cost Unit $ 20 6 3 7 4 6 $ 46 Total $ 920,000 276,000 138,000 322,000 184,000 276,000 $ 2,116,000 The Rets normally sell for $51 each. Fixed manufacturing overhead is $322,000 per year within the range of 38,000 through 46,000 Rets per year.
Miller Books is considering publishing a book about meditation. The fixed costs to publish the book is estimated at $160,000. Variable material costs are estimated at $6 per book. Demand over the life of the textbook is estimated at 4,000 copies. Miller books anticipates that they can sell the books for $46 per unit. a) Write an expression for total revenue b) Write an expression for total cost c) Write an expression for total profit d) Find the break-even point e) Recommend a strategy if Miller will not be able to sell more than 3,500 copies.
Required:(a) GEM has an opportunity to sell 10 000 units to an overseas customer. Import duties and other special costs associated with this order would total $42 000. The only selling costs that would be associated with the order would be a shipping cost of $9.00 per unit. What would be the minimum acceptable unit price for GEM to consider this order? (hint: GEM would not accept the order if it would reduce the company’s profit) (b) The company has 200 units of Flicks on hand that were produced two months ago. Due to blemishes on the units, it will be impossible to sell these units at the normal price. If the company wishes to sell them through regular sales channels, what would be the relevant cost for setting the minimum price? Explain. (c) “All future costs are relevant in decision making.” Do you agree? Explain.
Help me please
A buyer from another country offered to purchase 2,000 units of product for $ 2.50 per unit. The normal selling price is $ 3.00 per unit. The company's regular variable costs of $ 1.50 per unit would not change, however overall fixed costs would increase by $ 500 if his order is accepted. How much will net income increase if this special order is accepted? Multiple Choice $ 2,500. $ 2,000. $1,500. $ 3,000. $ 1,850.
It costs Sohar Company OMR 12 of variable and OMR 5 of fixed costs to produce one unit of production which normally sells for OMR 35. A foreign wholesaler offers to purchase 3,000 units at OMR 15 each. the company would incur special shipping costs of OMR 1 per unit if the order were accepted. Assuming that the company has the excess operating capacity to produce the 3,000 units. If the special order is accepted, what will be the effect on net income? Select one: Oa. None of the answers are correct Ob. OMR 6,000 increase O c. OMR 9,000 decrease O d. OMR 45,000 increase O e. OMR 6,000 decrease
Cullumber Company is considering two alternatives. Alternative A will have sales of $158,500 and costs of $100,100. Alternative B will have sales of $180,900 and costs of $133,200. Compare alternative A with alternative B showing incremental revenues, costs, and net income. (If an amount reduces the net income then enter with a negative sign preceding the number, e.g. -15,000 or parenthesis, e.g. (15,000).) Revenues Costs Net income $ $ Alternative A $ $ Alternative B $ $ Net Income Increase (Decrease)
It costs Bonita Industries $11 of variable and $5 of fixed costs to produce one scale which normally sells for $43. A foreign wholesaler offers to purchase 4100 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted. Bonita has sufficient unused capacity to produce the 4100 scales. If the special order is accepted, what will be the effect on net income? O $12300 increase $12300 decrease O $49200 decrease $61500 increase

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