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erhead mead ($286,000 per month, 13,000 units per month) =ts per unit $ 42 47 12 22 $ 123 ersity is building a new dorm and asked Dwight for a special price of $114 for an order of 9 ill the order using existing capacity without affecting total fixed costs for the month. Howev to a state agency, Dwight would have to file specified compliance documents with the stat s manager estimates that the time and expenses incurred by this filing will amount to $7,44 of the number of desks ordered. Dwight's manager is unsure whether to accept this order.

erhead mead ($286,000 per month, 13,000 units per month) =ts per unit $ 42 47 12 22 $ 123 ersity is building a new dorm and asked Dwight for a special price of $114 for an order of 9 ill the order using existing capacity without affecting total fixed costs for the month. Howev to a state agency, Dwight would have to file specified compliance documents with the stat s manager estimates that the time and expenses incurred by this filing will amount to $7,44 of the number of desks ordered. Dwight's manager is unsure whether to accept this order.

FINANCIAL ACCOUNTING
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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Required information Dwight Furniture makes desks specially designed for small spaces, such as studio apartments and extended-stay hotels. Each desk sells for $140 (without chair). The cost of each desk follows: Materials Labor Variable overhead Fixed overhead ($286,000 per month, 13,000 units per month) Total costs per unit The local university is building a new dorm and asked Dwight for a special price of $114 for an order of 900 desks. Dwight's can fill the order using existing capacity without affecting total fixed costs for the month. However, because the sale would be to a state agency, Dwight would have to file specified compliance documents with the state purchasing office. Dwight's manager estimates that the time and expenses incurred by this filing will amount to $7,440 and is independent of the number of desks ordered. Dwight's manager sunsure whether to accept this order and wants your advice. Required: a. Prepare a schedule to show the impact of providing the special order of 900 desks on Dwight's profits in addition to the regular production and sales of 13,000 desks per month. Complete this question by entering your answers in the tabs below. b. Based solely on the data given, what is the lowest price per unit at which the desks could be sold to the university without reducing Dwight's profits? Required A Required B Sales revenue Less variable costs: Materials Labor Variable overhead Prepare a schedule to show the impact of providing the special order of 900 desks on Dwight's profits in addition to the regular production and sales of 13,000 desks per month. (Enter your answers in thousands rounded to 1 decimal place. (i.e., 5,400,400 should be entered as 5,400.4). Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) Total variable cost Contribution margin Less: Fixed costs Operating profit Status Quo 13,000 Desks $ Show Transcribed Text (Thousands of Dollars) Alternative 13,900 Desks 0.0 $ Required A Lowest price 0.0 Difference Materials. Labor Variable overhead Fixed overhead ($286,000 per month, 13,000 units per month) Total costs per unit. $ 42 47 Required B > Required information Dwight Furniture makes desks specially designed for small spaces, such as studio apartments and extended-stay hotels. Each desk sells for $140 (without chair). The cost of each desk follows: 12 22 $ 123 per desk The local university is building a new dorm and asked Dwight for a special price of $114 for an order of 900 desks. Dwight's can fill the order using existing capacity without affecting total fixed costs for the month. However, because the sale would be to a state agency, Dwight would have to file specified compliance documents with the state purchasing office. Dwight's manager estimates that the time and expenses incurred by this filing will amount to $7,440 and is independent of the number of desks ordered. Dwight's manager unsure whether to accept this order and wants your advice. Complete this question by entering your answers in the tabs below. Required: a. Prepare a schedule to show the impact of providing the special order of 900 desks on Dwight's profits in addition to the regular production and sales of 13,000 desks per month. < Required A b. Based solely on the data given, what is the lowest price per unit at which the desks could be sold to the university without reducing Dwight's profits? $ 42 47 12 22 $ 123 Required A Required B Based solely on the data given, what is the lowest price per unit at which the desks could be sold to the university without reducing Dwight's profits? Required B
Transcribed Image Text:Required information Dwight Furniture makes desks specially designed for small spaces, such as studio apartments and extended-stay hotels. Each desk sells for $140 (without chair). The cost of each desk follows: Materials Labor Variable overhead Fixed overhead ($286,000 per month, 13,000 units per month) Total costs per unit The local university is building a new dorm and asked Dwight for a special price of $114 for an order of 900 desks. Dwight's can fill the order using existing capacity without affecting total fixed costs for the month. However, because the sale would be to a state agency, Dwight would have to file specified compliance documents with the state purchasing office. Dwight's manager estimates that the time and expenses incurred by this filing will amount to $7,440 and is independent of the number of desks ordered. Dwight's manager sunsure whether to accept this order and wants your advice. Required: a. Prepare a schedule to show the impact of providing the special order of 900 desks on Dwight's profits in addition to the regular production and sales of 13,000 desks per month. Complete this question by entering your answers in the tabs below. b. Based solely on the data given, what is the lowest price per unit at which the desks could be sold to the university without reducing Dwight's profits? Required A Required B Sales revenue Less variable costs: Materials Labor Variable overhead Prepare a schedule to show the impact of providing the special order of 900 desks on Dwight's profits in addition to the regular production and sales of 13,000 desks per month. (Enter your answers in thousands rounded to 1 decimal place. (i.e., 5,400,400 should be entered as 5,400.4). Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) Total variable cost Contribution margin Less: Fixed costs Operating profit Status Quo 13,000 Desks $ Show Transcribed Text (Thousands of Dollars) Alternative 13,900 Desks 0.0 $ Required A Lowest price 0.0 Difference Materials. Labor Variable overhead Fixed overhead ($286,000 per month, 13,000 units per month) Total costs per unit. $ 42 47 Required B > Required information Dwight Furniture makes desks specially designed for small spaces, such as studio apartments and extended-stay hotels. Each desk sells for $140 (without chair). The cost of each desk follows: 12 22 $ 123 per desk The local university is building a new dorm and asked Dwight for a special price of $114 for an order of 900 desks. Dwight's can fill the order using existing capacity without affecting total fixed costs for the month. However, because the sale would be to a state agency, Dwight would have to file specified compliance documents with the state purchasing office. Dwight's manager estimates that the time and expenses incurred by this filing will amount to $7,440 and is independent of the number of desks ordered. Dwight's manager unsure whether to accept this order and wants your advice. Complete this question by entering your answers in the tabs below. Required: a. Prepare a schedule to show the impact of providing the special order of 900 desks on Dwight's profits in addition to the regular production and sales of 13,000 desks per month. < Required A b. Based solely on the data given, what is the lowest price per unit at which the desks could be sold to the university without reducing Dwight's profits? $ 42 47 12 22 $ 123 Required A Required B Based solely on the data given, what is the lowest price per unit at which the desks could be sold to the university without reducing Dwight's profits? Required B
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