Falcon Co. produces a single product. Its normal selling price is $28 per unit. The variablecosts are $18 per unit. Fixed costs are $21,800 for a normal production run of 5,000 unitsper month. Falcon received a request for a special order that would not interfere with normalsales. The order was for 1,400 units with a special price of $20 per unit. Falcon has thecapacity to handle the special order, and for this order, a variable selling cost of $2 per unitwould be eliminated. If the order is accepted, the differential effect on profit would be a(n)◇ a. increase of $4,480O b. decrease of $3,360c. increase of $7,280d. increase of $5,600?13

Step 1:Computation of Contribution margin ParticularsAmountSpecial price of order$ 20 per unitLess:…

Answered: Falcon Co. produces a single product.…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

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Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 4EB: Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all...

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Falcon Co. produces a single product. Its normal selling price is $25 per unit. The variable costs are $18 per unit. Fixed costs are $22,500 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,500 units with a special price of $19 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $2 per unit would be eliminated. If the order is accepted, the differential effect on profit would be a(n) a. increase of $4,500 b. decrease of $2,700 C. increase of $5,850 d. increase of $3,600
Falcon Co. produces a single product. Its normal selling price is $30 per unit. The variable costs are $19 per unit. Fixed costs are $25,000 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,500 units with a special price of $20 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $1 per unit would be eliminated.If the order is accepted, what would be the impact on net income? a.decrease of $750 b.increase of $3,000 c.increase of $1,500 d.decrease of $4,500
Falcon Co. produces a single product. Its normal selling price is $26 per unit. The variable costs are $17 per unit. Fixed costs are $22,600 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,300 units with a special price of $19 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $2 per unit would be eliminated. If the order is accepted, what would be the impact on net income? a.decrease of $3,120 b.increase of $4,160 c.increase of $5,200 d.increase of $6,760
Falcon Co. produces a single product. Its normal selling price is $27 per unit. The variable costs are $17 per unit. Fixed costs are $21,400 for a normal production run of 5,000 units per month. Falcon received a request for a special order that would not interfere with normal sales. The order was for 1,530 units with a special price of $19 per unit. Falcon has the capacity to handle the special order, and for this order, a variable selling cost of $2 per unit would be eliminated. If the order is accepted, the differential effect on profit would be a(n) O a increase of $4,896 O b. increase of $7,956 Oc. increase of $6,120 O d. decrease of $3.672
Falcon Co. produces a single producd. Its normal selling price is $29 perunit. The variable costs are $16 per unit. Fixed costs are $20,400 for a normal production run of 5,000 units per morith. Faloon received a request fora spedal order that would not interfere with normal sales. The order was for 1,670 units with a special price of $21 perunit. Falcon has the camacity to handle the soedial order, and for this ordes, a variable selling cost of $2 per unit would be eliminated. If the order is accopted, what would the the impact on profit? a. increase of 15197 b. increase of 9352 c. increase of 11690 d. decrease of 7014
Sundial Company manufactures and sells watches for $44 each. Tick−Tock Company has offered Sundial $25 per watch for a one−time order of 5,700 watches. The total manufacturing cost per watch is $29 per unit and consists of variable costs of $21 per watch and fixed overhead costs of $8 per watch. Assume that Sundial has excess capacity and that the special pricing order would not adversely affect regular sales. What is the change in operating income that would result from accepting the special sales order? A. decrease of $22,800 B. increase of $22,800 C. increase of $142,500 D. decrease of $142,500
Sundial Company manufactures and sells watches for $42 each. Tick-Tock Company has offered Sundial $30 per watch for a one-time order of 5,600 watches. The total manufacturing cost per watch is $30 per unit and consists of variable costs of $22 per watch and fixed overhead costs of $8 per watch. Assume that Sundial has excess capacity and that the special pricing order would not adversely affect regular sales. What is the change in operating income that would result from accepting the special sales order? O A. decrease of $168,000 O B. increase of $168,000 O C. decrease of $44,800 O D. increase of $44,800
A toaster is manufactured at a variable cost of $17 per unit, fixed costs of $8 per unit, and variable selling costs of $3 per unit, and normally sells at $40 per unit. The company receives a special-order request for 5,000 units and is willing to pay a price of $25 per unit. It will take an additional $2 per unit for special packaging of the product. Would you accept or reject the special order? Show your calculations, would accepting the order increase or decrease your net income? What other two factors will influence your decision.
Carson Manufacturing, Inc., sells a single product for $34 per unit. At an operating level of 8,000 units, variable costs are $18 per unit and fixed costs $10 per unit. Carson has been offered a price of $18 per unit on a special order of 2,000 units by Big Mart Discount Stores, which would use its own brand name on the item. If Carson accepts the order, material cost will be $4 less per unit than for regular production. However, special stamping equipment costing $4,000 would be needed to process the order; the equipment would then be discarded. Assuming that volume remains within the relevant range, prepare an analysis of differential revenue and costs to determine whether Carson should accept the special order. Use a negative sign with answer to only indicate a loss from special order; otherwise do not use negative signs with your answers. Special Order Differential Analysis Differential revenue Answer Differential variable costs Answer Equipment cost Answer…
1.) A company receives a special order for 200 units that requires stamping the buyer's name on each unit, yielding an additional fixed cost of $400 to its normal costs. Without the order, the company is operating at 75% of capacity and produces 7,500 units of product at the costs below. The company's normal selling price is $22 per unit. The sales price for the special order is $18 per unit. Costs (7,500 Units) Variable costs Fixed costs per unit Direct materials $37,500 $5.00 Direct labor 60,000 $8.00 Overhead (30% variable) 20,000 $0.80 $14,000 Selling expenses |(60% variable) 25,000 $2.00 $10,000 The special order will not affect normal unit sales and will not increase fixed overhead and selling expenses. Variable selling expenses on the special order are reduced to one-half the normal amount. Should the company accept the special order?
Walton Corporation is currently selling 104 units of its product. The company is deciding the price that it should charge for a bulk order of 40 units. The variable cost per unit is $200. This order will not involve any additional fixed costs and the company's current sales will not be affected. The company targets a profit of $4,000 on the bulk order. What selling price per unit should the company quote for the bulk order?
Wheel Company makes a product, K9. It has a production capacity of 1,000 units, and it can sell all of 1,000 units to its regular customers. The regular selling price is $60 each. Wheel has received a request from Tom for a special order of 100 units of K9. This special order does not incur any variable selling cost. The following is the per-unit cost information: Variable manufacturing $18 Fixed manufacturing $20* Unit manufacturing cost $38 Variable selling $4 Fixed selling $8* Unit selling cost $12 Total cost $50 * based on production and sales of 1,000 units Whelel has received a speciar order from Tom (who is not a regular customer). He wants to buy 100 units at a discounted price. Wheell does not want the company's profit to decline by accepting the order from Tom. Then, Wheel has to charge at least _____ to Tom for each unit of K9. A. $18 B. $24 C. $46 D.…

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