Homework Help is Here – Start Your Trial Now!
Business
Accounting
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 $ 6.20 per unit 6.20 per unit 8.20 per unit $ 378,200 per year 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. Required: a. Calculate the fixed overhead per unit? b. Is the cost calculation appropriate? c. Should the offer from the Italian firm be accepted? Complete this question by entering your answers in the tabs below. Req A Req B and C Calculate the fixed overhead per unit? Note: Round your answer to 2 decimal places. Fixed overhead per unit

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 $ 6.20 per unit 6.20 per unit 8.20 per unit $ 378,200 per year 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. Required: a. Calculate the fixed overhead per unit? b. Is the cost calculation appropriate? c. Should the offer from the Italian firm be accepted? Complete this question by entering your answers in the tabs below. Req A Req B and C Calculate the fixed overhead per unit? Note: Round your answer to 2 decimal places. Fixed overhead per unit

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Please do not give solution in image format thanku 

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 $ 6.20 per unit 6.20 per unit 8.20 per unit $ 378,200 per year 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. Required: a. Calculate the fixed overhead per unit? b. Is the cost calculation appropriate? c. Should the offer from the Italian firm be accepted? Complete this question by entering your answers in the tabs bele Req A Req B and C Calculate the fixed overhead per unit? Note: Round your answer to 2 decimal places. Fixed overhead per unit < Roq A Req B and C
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 $ 6.20 per unit 6.20 per unit 8.20 per unit $ 378,200 per year 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. Required: a. Calculate the fixed overhead per unit? b. Is the cost calculation appropriate? c. Should the offer from the Italian firm be accepted? Complete this question by entering your answers in the tabs bele Req A Req B and C Calculate the fixed overhead per unit? Note: Round your answer to 2 decimal places. Fixed overhead per unit < Roq A Req B and C
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. Required: a. Calculate the fixed overhead per unit? b. Is the cost calculation appropriate?, c. Should the offer from the Italian firm be accepted? Complete this question by entering your answers in the tabs below. Req B and C b. Is the cost calculation appropriate? c. Should the offer from the Italian firm be accepted? Req A b. The cost calculation is appropriate c. The offer from the Italian firm should be < Req A Req Band C>
Transcribed Image Text: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. Required: a. Calculate the fixed overhead per unit? b. Is the cost calculation appropriate?, c. Should the offer from the Italian firm be accepted? Complete this question by entering your answers in the tabs below. Req B and C b. Is the cost calculation appropriate? c. Should the offer from the Italian firm be accepted? Req A b. The cost calculation is appropriate c. The offer from the Italian firm should be < Req A Req Band C>
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 2 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS