Elfalan Corporation produces a single product. The cost of producing and setting a ungle unt of this product at the company's normal activity level of 80,000 units per month is as follows Per Unit $ 22.50 $7.50 $ 1.70 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling & administrative expense Fixed selling & administrative expense $ 29,00 $2.70 $ 8.60 The normal selling price of the product is $6780 per un An order has been received from an overseas customer for 3.000 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fed costs. The variable selling and administrative expense would be $190 less per unit on this order than on normal sales Derect labor is a variable cost in this company Suppose there is ample de capacity to produce the units required by the overseas customer and the special discounted price on the special order is $60.60 per unit. The money financial advantage (disadvantages for the company as a result of accepong this special order should be
Elfalan Corporation produces a single product. The cost of producing and setting a ungle unt of this product at the company's normal activity level of 80,000 units per month is as follows Per Unit $ 22.50 $7.50 $ 1.70 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling & administrative expense Fixed selling & administrative expense $ 29,00 $2.70 $ 8.60 The normal selling price of the product is $6780 per un An order has been received from an overseas customer for 3.000 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fed costs. The variable selling and administrative expense would be $190 less per unit on this order than on normal sales Derect labor is a variable cost in this company Suppose there is ample de capacity to produce the units required by the overseas customer and the special discounted price on the special order is $60.60 per unit. The money financial advantage (disadvantages for the company as a result of accepong this special order should be
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Elfalan Corporation produces a single product. The cost of producing and setting a single unt of this product at the company's normal activity level of 30,000 units per month is as follows
Per Unit
$ 22.50
$7.50
$ 1.70
$ 19,00
$2.70
$ 8.60
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Variable selling & administrative expense
Fixed selling & administrative expense
The normat setting price of the product is $67.80 per un
An order has been received from an overseas customer for 3.000 units to be delivered this month at a special discounted price. This order would not change the total amount of the
company's fixed costs. The variable selling and administrative expense would be $1.90 less per unit on this order than on normal sales
Direct labor is a vantable cost in this company
Suppose there is ample idle capacity to produce the units required by the overseas customer and the special discounted price on the special order is $60.60 per unit. The monthly
financial advantage (disadvantage) for the company as a result of accepting this special order should be
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