ease in operating income of $60,000 more than it would be without accepting the sp price to ur interpretation of the changes to the contribution margin per unit and the operating inco co the distributor? nis question by entering your answers in the tabs below. Req A2 Req B1 Req B2 nterpretation of the changes to the contribution margin per unit and the operating income on a to the distributor? (Do not round intermediate calculations.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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price charged to the distributor?
b-1. Assume that Mazeppa is currently operating at full capacity. Show the calculation for the unit price to charge the distribute
will generate an increase in operating income of $60,000 more than it would be without accepting the special order?
b-2. What is your interpretation of the changes to the contribution margin per unit and the operating income on account of the
price charged to the distributor?
Complete this question by entering your answers in the tabs below.
Req A1
Req A2
Req B1
Req B2
What is your interpretation of the changes to the contribution margin per unit and the operating income on account of the unit
price charged to the distributor? (Do not round intermediate calculations.)
At a current operating level of 100,000 units, the company will not have to turn away any of its regular
customers in order to fi
Fie special order. If it wishes to increase operating income by
per
unit included in the special order, it only needs to generate a contribution margin per unit of
Thus, the selling price per unit included in the special order is
Req A1
Req B1
< Prev
1 of 4
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23
NOV
Transcribed Image Text:Check price charged to the distributor? b-1. Assume that Mazeppa is currently operating at full capacity. Show the calculation for the unit price to charge the distribute will generate an increase in operating income of $60,000 more than it would be without accepting the special order? b-2. What is your interpretation of the changes to the contribution margin per unit and the operating income on account of the price charged to the distributor? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B1 Req B2 What is your interpretation of the changes to the contribution margin per unit and the operating income on account of the unit price charged to the distributor? (Do not round intermediate calculations.) At a current operating level of 100,000 units, the company will not have to turn away any of its regular customers in order to fi Fie special order. If it wishes to increase operating income by per unit included in the special order, it only needs to generate a contribution margin per unit of Thus, the selling price per unit included in the special order is Req A1 Req B1 < Prev 1 of 4 Next > 23 NOV
Exercise 21.12 (Static) Pricing a Special Order (LO21-1, LO21-2, LO21-3)
Mazeppa Corporation sells relays at a selling price of $28 per unit. The company's cost per unit, based on full capacity of 160,000
units, is as follows:
Direct materials
Direct labor
Overhead (2/3 of which is variable)
Mazeppa has been approached by a distributor in Montana offering to buy a special order consisting of 30,000 relays. Mazeppa has
the capacity to fill the order. However, it will incur an additional shipping cost of $2 for each relay it sells to the distributor.
a-1. Assume that Mazęppa is currently operating at a level of 100,000 units. Show the calculation for the unit price to charge the
distributor which will generate an increase in operating income of $2 per unit?
a-2. What is your interpretation of the changes to the contribution margin per unit and the operating income on account of the unit
price charged to the distributor?
b-1. Assume that Mazeppa is currently operating at full capacity. Show the calculation for the unit price to charge the distributor which
will generate an increase in operating income of $60,000 more than it would be without accepting the special order?
b-2. What is your interpretation of the changes to the contribution margin per unit and the operating income on account of the unit
price charged to the distributor?
Complete this question by entering your answers in the tabs below.
Req A1
Req A2
Req B1
Req B2
Prev
1 of 4
Next >
23
NOV
17
étv li
280
649
%24
Transcribed Image Text:Exercise 21.12 (Static) Pricing a Special Order (LO21-1, LO21-2, LO21-3) Mazeppa Corporation sells relays at a selling price of $28 per unit. The company's cost per unit, based on full capacity of 160,000 units, is as follows: Direct materials Direct labor Overhead (2/3 of which is variable) Mazeppa has been approached by a distributor in Montana offering to buy a special order consisting of 30,000 relays. Mazeppa has the capacity to fill the order. However, it will incur an additional shipping cost of $2 for each relay it sells to the distributor. a-1. Assume that Mazęppa is currently operating at a level of 100,000 units. Show the calculation for the unit price to charge the distributor which will generate an increase in operating income of $2 per unit? a-2. What is your interpretation of the changes to the contribution margin per unit and the operating income on account of the unit price charged to the distributor? b-1. Assume that Mazeppa is currently operating at full capacity. Show the calculation for the unit price to charge the distributor which will generate an increase in operating income of $60,000 more than it would be without accepting the special order? b-2. What is your interpretation of the changes to the contribution margin per unit and the operating income on account of the unit price charged to the distributor? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B1 Req B2 Prev 1 of 4 Next > 23 NOV 17 étv li 280 649 %24
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