(b) Assume instead that the customer requests 110 units in the special order and offers $43 per unit. Sheffield management still believes there will be enough capacity to take on the special order. This time, however, variable selling costs will be incurred because the customer is working through a sales representative. How much better or worse off will Sheffield Industries be if it accepts this special order? (c) Sheffield Industries would be eTextbook and Media Save for Later Sheffield Industries would be eTextbook and Media ✓by $ Save for Later Assume instead the customer requests 160 units and both a discounted price of $47 per unit and a customized version of the fan. In order to make the customized version, Sheffield will need to purchase a special piece of equipment for $3,645, but it will not incur any variable selling costs for this order. How much better or worse off will the company be if it uses its available capacity and accepts this special order? by accepting this order. ✓by $ Attempts: 0 of 2 used by accepting this order. Submit Answer Attempts: 0 of 2 used Submit Answer
(b) Assume instead that the customer requests 110 units in the special order and offers $43 per unit. Sheffield management still believes there will be enough capacity to take on the special order. This time, however, variable selling costs will be incurred because the customer is working through a sales representative. How much better or worse off will Sheffield Industries be if it accepts this special order? (c) Sheffield Industries would be eTextbook and Media Save for Later Sheffield Industries would be eTextbook and Media ✓by $ Save for Later Assume instead the customer requests 160 units and both a discounted price of $47 per unit and a customized version of the fan. In order to make the customized version, Sheffield will need to purchase a special piece of equipment for $3,645, but it will not incur any variable selling costs for this order. How much better or worse off will the company be if it uses its available capacity and accepts this special order? by accepting this order. ✓by $ Attempts: 0 of 2 used by accepting this order. Submit Answer Attempts: 0 of 2 used Submit Answer
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Only need help with section b and c! Thank you!
Transcribed Image Text:(a)
Assume the customer requests 210 units in the special order and offers $53 per unit. Since the customer came directly to the
company, no variable selling cost will be incurred. How much better or worse off will Sheffield Industries be if it accepts this
special order, assuming it has enough idle capacity for the order?
Your answer is correct.
Sheffield Industries would be better off
(b)
eTextbook and Media
(c)
Sheffield Industries would be
Assume instead that the customer requests 110 units in the special order and offers $43 per unit. Sheffield management still
believes there will be enough capacity to take on the special order. This time, however, variable selling costs will be incurred
because the customer is working through a sales representative. How much better or worse off will Sheffield Industries be if it
accepts this special order?
eTextbook and Media
Save for Later
Sheffield Industries would be
by $
eTextbook and Media
Save for Later
by $
5250 by accepting this order.
Assume instead the customer requests 160 units and both a discounted price of $47 per unit and a customized version of the fan.
In order to make the customized version, Sheffield will need to purchase a special piece of equipment for $3,645, but it will not
incur any variable selling costs for this order. How much better or worse off will the company be if it uses its available capacity and
accepts this special order?
by $
by accepting this order.
Attempts: 1 of 2 used
Attempts: 0 of 2 used Submit Answer
by accepting this order.
Attempts: 0 of 2 used
Submit Answer
Transcribed Image Text:The management team of Sheffield Industries was evaluating its performance for the first half of the year. Production and sales of its
fans were on budget at 3,000 units to date, with the following income statement reflecting its income for the first half of the year.
Sales
Variable costs:
DM
DL
Variable-MOH
Variable selling
Contribution margin
Fixed costs:
Fixed-MOH
Fixed selling
Operating income (loss)
$42,000
33,000
9,000
6,000
33,000
104,000
$276,000
90,000
186,000
137,000
$49,000
Orders for the second half of the year were coming in slower than what the company had been expecting. When a new customer called
and requested a special discount, the sales team listened.
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