Blossom Company produced and sold 40,000 units of product and is operating at 70% of plant capacity. Unit information about its product is as follows: Sales price Variable manufacturing cost $70 $」」 10 55 $15 $45 Fixed manufacturing cost ($400,000 ÷ 40,000) Profit per unit The company received a proposal from a foreign company to buy 8,000 units of Blossom Company's product for $50 per unit. This is a one-time only order and acceptance of this proposal will not affect the company's regular sales. The president of Blossom Company is reluctant to accept the proposal because he is concerned that the company will lose money on the special order. (a1) Prepare a schedule reflecting an incremental analysis of this proposal. (Enter negative amounts using either a negative sign preceding

Blossom Company produced and sold 40,000 units of product and is operating at 70% of plant capacity. Unit information about its product is as follows: Sales price Variable manufacturing cost $70 $」」 10 55 $15 $45 Fixed manufacturing cost ($400,000 ÷ 40,000) Profit per unit The company received a proposal from a foreign company to buy 8,000 units of Blossom Company's product for $50 per unit. This is a one-time only order and acceptance of this proposal will not affect the company's regular sales. The president of Blossom Company is reluctant to accept the proposal because he is concerned that the company will lose money on the special order. (a1) Prepare a schedule reflecting an incremental analysis of this proposal. (Enter negative amounts using either a negative sign preceding

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 14MC: A company produces two products. E and F in batches of 100 units. The production and cost data are:...

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Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 50,000 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 Total $1,000,000 8 400,000 3 150,000 9 450,000 4 200,000 6 300,000 $50 $2,500,000 The Rets normally sell for $55 each. Fixed manufacturing overhead is $450,000 per year within the range of 41,000 through 50,000 Rets per year. Required: 1. Assume that due to a recession, Polaski Company expects to sell only 41,000 Rets through regular channels next year. A large retail chain has offered to purchase 9,000 Rets if Polaski is willing to accept a 16% discount off the regular price. There would be no sales commissions on this order; thus, variable selling expenses would be slashed by 75%. However, Polaski Company…
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Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 40,000 Rets per year. Costs associated with this level of production and sales are given below: Total Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead 50 Variable selling expense Fixed selling expense Unit $ 25 $ 1,000,000 8 320,000 3 120,000 5 200,000 4 6 160,000 240,000 $ 51 $ 2,040,000 Total cost The Rets normally sell for $56 each. Fixed manufacturing overhead is $200,000 per year within the range of 31,000 through 40,000 Rets per year. Required: 1. Assume that due to a recession, Polaski Company expects to sell only 31,000 Rets through regular channels next year. A large retail chain has offered to purchase 9,000 Rets if Polaski is willing to accept a 16% discount off the regular price. There would be no sales commissions on this order; thus, variable selling expenses would be slashed by 75%. However, Polaski…
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 10,000 Rets per year. Costs associated with this level of production and sales are given below: Unit Total Direct materials £9 £ 90,000 Direct labour 5 50,000 Variable manufacturing overhead 2 20,000 Fixed manufacturing overhead 5 50,000 Variable selling expense 2 20,000 Fixed selling expense 4 40,000 Total cost 27 270,000 The Rets normally sell for £30 each. Fixed manufacturing overhead is constant at £800,000 per year within the range of 5,000 through 10,000 Rets per year. Required: 1. Assume that due to a recession, Polaski Company expects to sell only 5,000 Rets through regular channels next year. A large retail chain has offered to purchase 5,000 Rets if Polaski is willing to accept a 14% discount off the regular price. There would be no sales commissions on this…
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 30,000 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 Unit $ 15 Total $ 450,000 8 240,000 3 90,000 9 270,000 4 120,000 6 180,000 $ 45 $ 1,350,000 Total cost The Rets normally sell for $50 each. Fixed manufacturing overhead is $270,000 per year within the range of 25,000 through 30,000 Rets per year. Required: 1. Assume that due to a recession, Polaski Company expects to sell only 25,000 Rets through regular channels next year. A large retail chain has offered to purchase 5,000 Rets if Polaski is willing to accept a 16% discount off the regular price. There would be no sales commissions on this order; thus, variable selling expenses would be slashed by 75%. However, Polaski Company…