MSI has been approached by a fourth-grade teacher from Portland about the possibility of creating a specially designed game thatwould be customized for her classroom and environment. The teacher would like an educational game to correspond to her classroomcoverage of the history of the Pacific Northwest, and the state of Oregon in particular. MSI has not sold its products directly to teachersor school systems in the past, but its Marketing Department identified that possibility during a recent meeting.The teacher has offered to buy 2,100 copies of the CD at a price of $7.00 each. MSI could easily modify one of its existing educationalprograms about U.S. history to accommodate the request. The modifications would cost approximately $370. A summary of theinformation related to production of MSI's current history program follows:Direct materialsDirect laborVariable manufacturing overheadFixed manufacturing overheadTotal cost per unitSales price per unit$ 1.170.492.051.80$ 5.51$ 12.00Required:1. Compute the incremental profit (or loss) from accepting the special order.2. Should MSI accept the special order?3. Suppose the special order had been to purchase 2,100 copies of the program for $3.50 each. Compute the incremental profit (orloss) from accepting the special order under this scenario.4. Suppose MSI is operating at full capacity. To accept the special order, it would have to reduce production of the history program.Compute the special order price at which MSI would be indifferent between accepting or rejecting the special order.

In cost accounting, a special order is a one-time customer order, often involving a large quantity…

Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost per unit Sales price per unit $ 1.17 0.49 2.05 1.80 $ 5.51 $ 12.00 Required: 1. Compute the incremental profit (or loss) from accepting the special order. 2. Should MSI accept the special order? 3. Suppose the special order had been to purchase 2,100 copies of the program for $3.50 each. Compute the incremental profit (or loss) from accepting the special order under this scenario. 4. Suppose MSI is operating at full capacity. To accept the special order, it would have to reduce production of the history program. Compute the special order price at which MSI would be indifferent between accenting or rejecting the special order

Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost per unit Sales price per unit $ 1.17 0.49 2.05 1.80 $ 5.51 $ 12.00 Required: 1. Compute the incremental profit (or loss) from accepting the special order. 2. Should MSI accept the special order? 3. Suppose the special order had been to purchase 2,100 copies of the program for $3.50 each. Compute the incremental profit (or loss) from accepting the special order under this scenario. 4. Suppose MSI is operating at full capacity. To accept the special order, it would have to reduce production of the history program. Compute the special order price at which MSI would be indifferent between accenting or rejecting the special order

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Use the below table to answer the following questions. Selling Price = $43.00 Fixed Cost $47,200 47, 200 47,200 57, 200 57, 200 57, 200 67,200 67,200 67,200 Required Variable Cost 15 16 17 15 16 17 15 16 17 2,200 $14,400 12, 200 10,000 4,400 2,200 (5,600) (7,800) (10,000) 3,200 $42,400 39, 200 36,000 32,400 29, 200 26,000 22,400 19, 200 16,000 Sales Volume 4,200 Profitability $70,400 66, 200 62,000 60,400 56,200 52,000 50,400 46, 200 42,000 5,200 $98,400 93,200 88,000 88,400 83,200 78,000 78,400 73,200 68,000 6, 200 $126,400 120, 200 114,000 116,400 110, 200 104,000 106,400 100, 200 94,000 a. Determine the sales volume, fixed cost, and variable cost per unit at the break-even point. b. Determine the expected profit if Franklin projects the following data for Delatine: sales, 4,200 bottles; fixed cost, $47,200; and variable cost per unit, $17. c. Franklin is considering new circumstances that would change the conditions described in Requirement b. Specifically, the company has an…
1. What would be the gross margin for FPD if it accepted the transfer price that will be charged by CD?
need complete and correct answer with all work/explanation /computation answer in text
Apple Ltd makes and sells a single product, for which variable costs are follows: Direct materials £20 Direct labour £16 Variable production overhead £12 £48 The sales price is £60 per unit, and fixed costs per annum are £136,000. The company wishes to make a profit of £32,000 per annum. Required: Determine the sales required to achieve this profit
(e) Product Blue Product Red Selling $12.00 $24.00Variable cost $4.00 $8.00Contribution margin $8.00 $16.00Fixed costs apportioned $200,000 $400,00Budgeted Sales Units 140,000 60,000 Calculate the breakeven points, for each product and the company as a whole and comment on your findings f)Discuss the merits and demerits of the cost volume profit analysis (CVP)