Edalyn Corporation has received a request for a special order of 8,400 units of product Amity for $45.30 each. The normal sellingprice of this product is $50.40 each, but the units would need to be modified slightly for the customer. The normal unit product cost ofproduct Amity is computed as follows:Direct materialsDirect laborVariable manufacturing overheadFixed manufacturing overheadUnit product costes$16.105.402.605.50$29.60Direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. Thecustomer would like some modifications made to product Amity that would increase the variable costs by $5.00 per unit and thatwould require a one-time investment of $44,800 in special molds that would have no salvage value. This special order would have noeffect on the company's other sales. The company has ample spare capacity for producing the special order.Required:Determine the effect on the company's total net operating income of accepting the special order.

Answered: Image /qna-images/answer/59d60afc-d475-494d-a593-312f3b3b9971.jpg

Answered: Edalyn Corporation has received a…

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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Costner produces two product lines. Prices/costs per unit follow. "W" "H" Selling price $60 $45 Direct material $16 $12 Direct labor ($20/hour) $15 $10 Variable overhead $13 $8 Demand for "W" is 216 units and "H" is 342 units If Costner has only 177 labor hours available, how many units of "W" should be manufactured? Round your final answer to the nearest whole unit.
A customer has requested a special order of ABC Co's primary product and has offered to pay $30 per unit. While the product would be modified slightly for the special order, the product's normal information is provided below Sales price per unit Direct materials per unit Direct labor per unit $25.50 Total Fixed Costs $6.20 $2 Variable manufacturing overhead per unit $ 4.40 $1,150,000 The customer would like modifications made to each product that would increase the variable costs by $2.20 per unit and that would require an investment of $24,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. How large would the special order have to be in units in order for ABC Co to break even on the special order?
Frannie Fans currently manufactures ceiling fans that include remotes to operate them. The current cost to manufacture 10,020 remotes is as follows: Direct materials Direct labor Variable overhead Fixed overhead Total Frannie is approached by Lincoln Company, which offers to make the remotes for $18 per unit. Required: Cost 10 $ 65,130 $ 55,110 $ 30,060 $ 50,100 $ 200,400 1. Compute the difference in cost per unit between making and buying the remotes if none of the fixed costs can be avoided. What is the change in net income, if Frannie Fans buys the remotes? 2. Compute the difference in cost per unit between making and buying the remotes if $20,040 of the fixed costs can be avoided. What is the change in net income, if Frannie Fans buys the remotes? 3. What is the change in net income if fixed cost of $20,040 can be avoided and Frannie could rent out the factory space no longer in use for $20,040? Complete this question by entering your answers in the tabs below. Required 1 Required…
Paul's Pumps manufactures three different product lines: Model A, Model B, and Model C. Plenty of market demand exists for all models.The table below reports the prices and costs per unit of each product. Model A Model B Model C Selling price $50 $60 $70 Direct materials costs $6 $6 $ 6 Direct labor costs ($12 per labor hour) $12 $12 $24 Variable support costs ($4 per machine hour) $4 $8 $8 Fixed support costs $10 $10 $10 Assuming that machine hours are limited (i.e., this is the constrained resource), which model is the most profitable to produce? Select one: a. Model B X b. Model A and B would be equally profitable c. Model A d. Model C
Novak Productions Limited manufactures and sells three different products of different qualities. They are referred to as: Normal, High, and Superior. The accounting department provides the following information on these products: Normal High Superior Selling price per unit $ 35.00 $ 47.00 $ 54.00 Variable costs per unit $ 30.17 $ 40.00 $ 50.00 Contribution margin per unit $ 4.83 $ 7.00 $ 4.00 Machine hours required 0.02 0.04 0.08 (a) Determine the contribution margin per machine hour. Contribution Margin Normal $ per machine hour High $ per machine hour Superior $ per machine hour
Dinesh Bhai
Gadubhai
Epsilon Company can produce a unit of product for the following costs: Direct material $ 8.10 Direct labor 24.10 Overhead 40.50 Total product costs per unit $ 72.70 An outside supplier offers to provide Epsilon with all the units it needs at $64.55 per unit. If Epsilon buys from the supplier, the company will still incur 30% of its overhead. Epsilon should choose to:
Bridgeport Company manufactures and sells two products. Relevant per-unit data concerning each product follow: Selling price Variable costs Machine hours Product Basic $43.00 $19.00 0.50 Show Transcribed Text Calculate the contribution margin per machine hour for each product. Question Part Score Contribution margin per machine hour $ Basic eTextbook and Media Deluxe Deluxe $52.00 $23.30 Bridgeport should manufacture the Basic 0.70 If 1,800 additional machine hours are available, which product should Bridgeport manufacture? - Show Transcribed Text Total contribution margin $ Basic Prepare an analysis showing the total contribution margin if 1,800 additional hours are: (1) Divided equally between the products. product. $ Deluxe Total contribution margin $ (2) Allocated entirely to the product identified in part (b).
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Gelb Company currently makes a key part for its main product. Making this part incurs per unit variable costs of $1.30 for direct materials and $0.85 for direct labor. Incremental overhead to make this part is $1.44 per unit. The company can buy the part for $3.76 per unit. (a) Prepare a make or buy analysis of costs for this part. (Enter your answers rounded to 2 decimal places.) (b) Should Gelb make or buy the part? (a) Make or Buy Analysis Direct materials Direct labor Overhead Cost to buy Cost per unit Cost difference (b) Company should: Make Buy
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