Direct materials 10 Direct labor 7 Variable overhead Fixed overhead Unit cost 31 The product normally sells for 40 each. A customer has offered to buy 60,000 units for 30 each. The customer will pay the transportation charge on the units purchased. Fixed selling costs are 1,000,000 per year. Variable selling costs of 4 per unit sold are added to cover the transportation cost. Although production capacity is 500,000 units per year, the company expects to produce only 400,000 units next year. If the company accepts the special order, what will be the effect on income? 6.

Direct materials 10 Direct labor 7 Variable overhead Fixed overhead Unit cost 31 The product normally sells for 40 each. A customer has offered to buy 60,000 units for 30 each. The customer will pay the transportation charge on the units purchased. Fixed selling costs are 1,000,000 per year. Variable selling costs of 4 per unit sold are added to cover the transportation cost. Although production capacity is 500,000 units per year, the company expects to produce only 400,000 units next year. If the company accepts the special order, what will be the effect on income? 6.

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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Murphy's Paw produces and sells 1,000 units of a single product per year (with excess capacity of 400 units). The cost of producing and selling a single unit is: Direct materials $11 Direct labor 8 Allocated variable overhead 1 Allocated fixed overhead 1 The normal selling price is $50.00 per unit. An order has been received from an overseas company for 100 units at the special price of $40.00 per unit. What would be the additional operating income (or loss) of taking on this special order? Use a - sign for a loss.
Flying Cloud Co. has the following operating data for its manufacturing operations: Unit selling price $ 250 Unit variable cost 100 Total fixed costs 840,000 The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%. Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%. If sales prices are held constant, the next break-even point for Flying Cloud Co. will be a. increased by 800 units b. increased by 640 units c. decreased by 640 units d. increased by 400 units
Andrew Company expects to incur the following costs at the planned production level of 20,000 units: DM P200,000 DL 240,000 VOH 120,000 FOH 60,000 The selling price is P50 per unit. The company currently operates at full capacity of 20,000 units. Capacity can be increased to 26,000 units by operating overtime. Variable costs increase by P28 per unit for overtime production. Fixed overhead costs remain unchanged when overtime operations occur. Andrew has received a special order from Leann Inc. who has offered to buy 4,000 units at P60 each. Should the company accept the special order?
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Black pens produces 12,000 units of gel pen T50 annually at a total cost of 270,000 Direct materials 51,000 Direct labor 75,000 Variable overhead 65,000 Fixed overhead 90,000 Total 281,000 Classic pens has offered to supply 12,000 units of T50 per year for 20 per unit. If Black pens accepts the offer, 5 per unit of the fixed overhead would be saved. In addition, some of Black pens facilities could be rented to a third party for 23,000 per year. What are the relevant costs for the "make" alternative?
Ferkil Corporation manufacturers a single product that has a selling price of $20.00 per unit. Fixed expenses total $63,000 per year, and the company must sell 9,000 units to break even. If the company has a target profit of $17,500, sales in units must be: Multiple Choice O 9,875 units (O 11,500 units 12,150 units 10,682 units
Subject:- Account
FRANCORP sells two products. Products M N Selling price per unit $80 $60 Less variable expenses per unit $46 $40 Contribution margin per unit $34 $20 Current demand per week (units) 2,100 2,400 Processing time required on machine XYZ per unit 2 min. 1 min. Machine XYZ is a constrained resource and is being used at 100% capacity. Machine XYZ has a capacity of 3,000 minutes per week. Assuming FRANCORP wants to maximize its total contribution margin, how much of each product should it produce? a. 2400 units of N and 300 units of M b. 300 units of N and 2100 units of M c. 1200 units of N and 1050 units of M d. 2400 units of N and 0 units of M
not graded Sell or Process FurtherJensen Manufacturing Company makes a partially completed assembly unit that it sells for $44 per unit. Normally, 38,000 units are sold each year. Variable unit cost data on the assembly are as follows: Direct material $10 Direct labor 8 Variable manufacturing overhead 4 The company is now using only 70% of its normal capacity; it could fully use its normal capacity by processing the assembly further and selling it for $51 per unit. If the company does this, material and labor costs will each increase by $2 per unit and variable overhead will go up by $1 per unit. Fixed costs will increase from the current level of $160,000 to $225,000. Prepare an analysis showing whether Jensen should process the assemblies further.Use a negative sign with answer to only indicate a loss from processing assemblies further; otherwise do not use negative signs with your answers. Sell of Process Further Differential Analysis Differential revenue…
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Ferkil Corporation manufacturers a single product that has a selling price of $20.00 per unit. Fixed expenses total $45,000 per year, and the company must sell 4,500 units to break even. If the company has a target profit of $19,000, sales in units must be: Group of answer choices 5,450 units 6,750 units 6,400 units 5,991 units