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Circuit Masters Incorporated (CMI) is presently operating at 80% of capacity and manufacturing 122,000 units of a patented electronic component. The cost structure of the component is as follows: Raw materials Direct labor Variable overhead Fixed overhead An Italian firm has offered to purchase 20,200 of the components at a price of $25.00 per unit, FOB CMI's plant. The normal selling price is $32.60 per component. This special order will not affect any of CMI's "normal" business. Management calculated that the cost per component is $23.70, so it is reluctant to accept this special order. $ 6.20 per unit 6.20 per unit 8.20 per unit $ 378,200 per year Required: a. Calculate the fixed overhead per unit? b. Is the cost calculation appropriate? c. Should the offer from the Italian firm be accepted? Req A Complete this question by entering your answers in the tabs below. Req B and C Answer is not complete. Calculate the fixed overhead per unit? Note: Round your answer to 2 decimal places. Fixed overhead per unit $ 23.70

Circuit Masters Incorporated (CMI) is presently operating at 80% of capacity and manufacturing 122,000 units of a patented electronic component. The cost structure of the component is as follows: Raw materials Direct labor Variable overhead Fixed overhead An Italian firm has offered to purchase 20,200 of the components at a price of $25.00 per unit, FOB CMI's plant. The normal selling price is $32.60 per component. This special order will not affect any of CMI's "normal" business. Management calculated that the cost per component is $23.70, so it is reluctant to accept this special order. $ 6.20 per unit 6.20 per unit 8.20 per unit $ 378,200 per year Required: a. Calculate the fixed overhead per unit? b. Is the cost calculation appropriate? c. Should the offer from the Italian firm be accepted? Req A Complete this question by entering your answers in the tabs below. Req B and C Answer is not complete. Calculate the fixed overhead per unit? Note: Round your answer to 2 decimal places. Fixed overhead per unit $ 23.70

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Req A Req B and C b. Is the cost calculation appropriate? c. Should the offer from the Italian firm be accepted? b. The cost calculation is appropriate c. The offer from the Italian firm should be
Transcribed Image Text:Req A Req B and C b. Is the cost calculation appropriate? c. Should the offer from the Italian firm be accepted? b. The cost calculation is appropriate c. The offer from the Italian firm should be
Circuit Masters Incorporated (CMI) is presently operating at 80% of capacity and manufacturing 122,000 units of a patented electronic component. The cost structure of the component is as follows: Raw materials Direct labor Variable overhead Fixed overhead An Italian firm has offered to purchase 20,200 of the components at a price of $25.00 per unit, FOB CMI's plant. The normal selling price is $32.60 per component. This special order will not affect any of CMI's "normal" business. Management calculated that the cost per component is $23.70, so it is reluctant to accept this special order. $ 6.20 per unit 6.20 per unit 8.20 per unit $ 378,200 per year Required: a. Calculate the fixed overhead per unit? b. Is the cost calculation appropriate? c. Should the offer from the Italian firm be accepted? Req A Complete this question by entering your answers in the tabs below. Req B and C Answer is not complete. Calculate the fixed overhead per unit? Note: Round your answer to 2 decimal places. Fixed overhead per unit $ 23.70
Transcribed Image Text:Circuit Masters Incorporated (CMI) is presently operating at 80% of capacity and manufacturing 122,000 units of a patented electronic component. The cost structure of the component is as follows: Raw materials Direct labor Variable overhead Fixed overhead An Italian firm has offered to purchase 20,200 of the components at a price of $25.00 per unit, FOB CMI's plant. The normal selling price is $32.60 per component. This special order will not affect any of CMI's "normal" business. Management calculated that the cost per component is $23.70, so it is reluctant to accept this special order. $ 6.20 per unit 6.20 per unit 8.20 per unit $ 378,200 per year Required: a. Calculate the fixed overhead per unit? b. Is the cost calculation appropriate? c. Should the offer from the Italian firm be accepted? Req A Complete this question by entering your answers in the tabs below. Req B and C Answer is not complete. Calculate the fixed overhead per unit? Note: Round your answer to 2 decimal places. Fixed overhead per unit $ 23.70
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