Jade Ltd. manufactures a product, which regularly sells for $67.75. This product has the following costs per unit at the expected production of 47,500 units: Cost Amount Direct labour $20.00 Direct materials 10.50 Manufacturing overhead (36% is variable) 24.00 The company has the capacity to produce 52,250 units. A wholesaler has offered to pay $77 for 12,000 units. If Jade Ltd. accepts this special order, operating income would increase (decrease) by how much?
Q: Pardo Company produces a single product and has capacity to produce 140,000 units per month. Costs…
A: VARIABLE COSTING INCOME STATEMENT Variable Costing Income Statement is One of the Important Cost…
Q: cat ine. Has been manufacturing its own Camera for its Mobile Phone. The company is currently…
A: Make or buy decision is a technique used by a manufacturing organization to decide whether to make…
Q: Fancy Lighting Company makes 4,000 units per year of a part it uses in the luxury lighting products…
A: Every business organization aims is to earn maximum profit, In the competitive environment is it not…
Q: Justine Corporation currently makes rolls for deli sandwiches it produces. It uses 40,000 rolls…
A: Working: Avoidable fixed overhead = Total fixed overhead x 20% = $0.20 per roll x 20% = $0.04 per…
Q: Every year Cheyenne Industries manufactures 8,000 units of part 231 for use in its production cycle.…
A: Relevant cost in management The term relevant cost really matters. The relevant cost is the cost…
Q: Homestead Jeans Co. has an annual plant capacity of 60,300 units, and current production is 47,100…
A: The differential analysis is made by the company to measure the difference in the cost and revenue…
Q: Ortega Industries manufactures 20,250 components per year. The manufacturing cost of the components…
A: Decision-making to purchase supplies from outside refers to the process by which individuals or…
Q: This Little Light, Inc. is a manufacturer of lamps. Little Light makes 40,000 units per year of a…
A: Indifference point (IDP) = Differential Fixed costs/Differential Variable cost per unit In other…
Q: Ross has received a special order for 16,000 units of its product at a special price of $19. The…
A: Lets understand the basics.When any special order situation arise, management have to decide whether…
Q: Prepare an analysis showing the total cost savings, if any, that Oriole will realize by buying the…
A: Net income - it is income earned which is derived by deducting costs from revenueDecision - we…
Q: Sheridan Company purchases sails and produces sailboats. It currently produces 1,270 sailboats per…
A: The decision related to make-or-buy depends on comparing the relevant cost of making and the cost of…
Q: ABC Company has been manufacturing its own products. The company is currently operating at 100% of…
A: In case there are alternatives of making or buying, Then total costs at both the alternatives should…
Q: Cairney, Incorporated manufactures a specialized part used in internal combustion engines. The…
A: a. To determine the cost per unit that the cost system should report, we need to consider both fixed…
Q: Perennial Company, a manufacturer of decorative pots, expects sales of 500,000 pots at $10 each…
A: The objective of this question is to determine the impact on the operating profit of Perennial…
Q: SadBoi, Inc. produces high quality water-proof tissue papers. Mr. Ramos, Sadboi's Managerial…
A: Break-even point: - Break-even point is the point where total sales of the company is equal to the…
Q: Bridgeport Manufacturing has an annual capacity of 83,800 units per year Currently, the company is…
A: Current Net Income:Sales = 77,300 units × $103 per unit = $7,961,900Variable Costs = 77,300 units ×…
Q: Crane Company produces golf discs which it normally sells to retailers for $7 each. The cost of…
A: Please see the answers below. Explanation: Step 1: (a) Incremental Analysis for the Special Order In…
Q: A company makes two products A and B, using a CNC milling machine which is classified as a single…
A: Working Note #1 Computation of effective capacity: Unit load of the mix= Product mix of product A *…
Q: Every year Kansas Company manufactures 7,900 units of part 231 for use in its production cycle. The…
A:
Q: Answer
A: Step 1: Unit-level costs are related to the production of each unit of product so it will be changed…
Q: Gelb Company currently manufactures 47,500 units per year of a key component for its manufacturing…
A: Incremental cost: Incremental cost is the additional cost incurred by the company if it produces…
Q: Walton Electronics currently produces the shipping containers it uses to deliver the electronics…
A: The differential analysis is performed to compare the different alternatives available with the…
Q: Luca Inc. has received a special order for 2,000 units of its product at a special price of $75. The…
A: Management accounting is widely used by managers to determine the differential costs of the product…
Q: Scott Corporation produces a part that is used in the production of one of its products. The…
A: Solution Concept In a make or buy decision , the cost of making a product is compared to the cost of…
Q: a. What cost per unit should the cost system report to facilitate management decision making? Note:…
A: To determine the cost per unit, we need to consider both fixed and variable costs. The fixed cost is…
Q: he Mighty Music Company produces and sells a desktop speaker for $200. The company has the capacity…
A: If a company is faced with a special order and the selling price for the order is the same as the…
Q: Garston Company produces a single model wind turbine and has an annual plant capacity of 3,000…
A: Variable cost means the cost which vary with the level of output where as fixed cost remain fixed…
Q: Lakeside Incorporated produces a product that currently sells for $42 per unit. Current production…
A: Lets understand the basics.When special order condition arises then management need to choose…
Q: Impala Industries manufactures a component used by car manufacturers. Impala can produce…
A: Particulars First (880,000 units) Next (120,000 units) Total operating income Sales $7,040,000…
Q: Perry Industries has an annual plant capacity of 72,000 units; cument production is 59,000 units per…
A: Variable costs are costs that vary with the change in the level of output whereas fixed costs are…
Q: Adams Electronics currently produces the shipping containers it uses to deliver the electronics…
A: The relevant costs are the avoidable costs that can be ignored if the alternative is not chosen. The…
Q: Blanchard Company manufactures a single product that sells for $200 per unit and whose total…
A: An income statement, also known as a profit and loss statement (P&L), is a financial statement…
Q: Bronco Company owns a machine that can produce two specialized products. Production time for Product…
A: Formula: Contribution margin per production hour = Contribution margin per unit x Units produced per…
Q: Colt Company owns a machine that can produce two specialized products. Production time for Product…
A: The hourly contribution is calculated below, TLX gives the higher hourly contribution as compared…
Q: Widget Inc. manufactures widgets. The company has the capacity to produce 100,000 widgets per year,…
A: SPECIAL ORDER ANALYSISUntill There is any Information is Provided, There Shall be no additional…
Q: A small shop in Bulacan fabricates portable threshers for palay producers in the locality. The shop…
A: The question is related to Breakeven point sales. The Breakeven point is that level of sales at…
Q: Every year Marigold Industries manufactures 6,100 units of part 231 for use in its production cycle.…
A: RELEVANT COST The Cost that are Different in Different alternatives are called Relevant Cost.…
Q: a. Prepare a differential analysis dated November 12 on whether to reject (Alternative 1) or accept…
A: Differential analysis (also called incremental analysis) is a management accounting technique in…
Q: Tamarisk Manufacturing incurs unit costs of $7.20 ($5.20 variable and $2.00 fixed) in making a…
A: Net income - it is income earned which is derived by deducting costs from revenueDecision - we…
Q: Gadubhai
A: Dear student,Part 1: Answer:The financial advantage of purchasing the part rather than making it is…
Q: Harcourt Manufacturing (HM) has the capacity to produce 11,800 fax machines per year. HM currently…
A: Variable cost means the cost which vary with level of output where as fixed cost remain fixed. In…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- Muscat Inc. has been manufacturing its own Camera for its Mobile Phone. The company is currently operating at 100% of capacity. Variable manufacturing overhead cost is OMR 3 per unit. The direct materials and direct labor cost per unit to make the camera are OMR 4 and OMR 6, respectively, fixed cost is OMR 50,000. Normal production is 50,000 Mobile Phone per year. A supplier offers to make the Cameras at a price of OMR 13.50 per unit. If Muscat accepts the supplier's offer; all variable manufacturing costs will be eliminated, but the OMR 50,000 of fixed manufacturing overhead currently being charged to the Cameras will have to be absorbed by other products. what will be the effect on net income? if the productive capacity released by not making the Cameras could be used to produce income of R.O. 40,000 Select one: O a. OMR 15,000 increase O b. None of the answers are correct Oc.OMR 25,000 decrease O d. OMR 15,000 decrease e. OMR 725,000 increaseCairney, Incorporated manufactures a specialized part used in internal combustion engines. The annual demand for the part is 261,000 units. The facility has a practical capacity of 276,000 units annually. The company leased the current facility because facilities capable of manufacturing the unit require machines that can produce 69,000 units each. The annual cost of the facility is $1,092,960. The variable cost of a part is $4. Required: a. What cost per unit should the cost system report to facilitate management decision making? Note: Round your answer to 2 decimal places. b. What is the cost of excess capacity? a. Cost per unit b. Cost of excess capacity $ $ 8.19 122,850Ahrends Corporation makes 44,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials $ 23.80 Direct labor 27.70 Variable manufacturing overhead 8.70 Fixed manufacturing overhead 39.70 Unit product cost $ 99.90 An outside supplier has offered to sell the company all of these parts it needs for $86.20 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $286,000 per year. If the part were purchased from the outside supplier, all of the direct labor cost of the part would be avoided. However, $34.40 of the fixed manufacturing overhead cost being applied to the part would continue even if the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company's…
- Ahrends Corporation makes 46,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost $ 14.30 23.90 3.00 28.30 $69.50 An outside supplier has offered to sell the company all of these parts it needs for $55.80 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $368,000 per year If the part were purchased from the outside supplier, all of the direct labor cost of the part would be avoided. However, $24.90 of the fixed manufacturing overhead cost being applied to the part would continue even if the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company's remaining products What…Specter Company makes 20,000 units per year of a part it uses in the products it manufactures.The unit product cost of this part is computed as follows:Direct materials $25.10Direct labour 18.20Variable manufacturing overhead 2.40Fixed manufacturing overhead 13.40Unit product cost $56.70An outside supplier has offered to sell the company all these parts it needs for $56.00 a unit. Ifthe company accepts this offer, the facilities now being used to make the part could be used tomake more units of a product that is in high demand. The additional contribution margin on thisother product would be $50,000 per year.If the part were purchased from the outside supplier, all the direct labour cost of the part wouldbe avoided. However, $5.10 of the fixed manufacturing overhead cost being applied to the partwould continue even if the part were purchased from the outside supplier. This fixedmanufacturing overhead cost would be applied to the company's remaining products.Required:Part a:Calculate…Colt Company owns a machine that can produce two specialized products. Production time for Product TLX is three units per hour and for Product MTV is five units per hour. The machine’s capacity is 2,600 hours per year. Both products are sold to a single customer who has agreed to buy all of the company’s output up to a maximum of 4,420 units of Product TLX and 5,995 units of Product MTV. Selling prices and variable costs per unit to produce the products follow. $ per unit Product TLX Product MTV Selling price per unit $ 11.50 $ 6.90 Variable costs per unit 3.45 4.14 Determine the company's most profitable sales mix and the contribution margin that results from that sales mix. (Round per unit contribution margins to 2 decimal places.)
- Smooth Company manufactures decorative mugs and has been approached by a new customer with an offer to purchase 15,000 units at a price of P70/unit. The new customer is geographically separated from Smooth Company's other customers and existing sales will not be affected. Smooth Company normally produce and sell only 65,000 units in the year. The normal sales price is P120 per unit. Production cost information is as follows: Direct materials P30.00 P22.50 P11.50 Direct labor Variable overhead Fixed overhead P18.00 If Smooth Company accepted the order, they would have to purchase a special logo labelling machine that will cost P120,000. The machine will be used to label the 15,000 units and will be scrapped afterwards. In addition, each logo requires additional direct materials of P2.00. Which alternative is best for Smooth Company? By how much profit will increase or decrease if the order is accepted?Ahrends Corporation makes 43,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost $ 12.80 23.30 2.10 26.50 $ 64.70 An outside supplier has offered to sell the company all of these parts it needs for $51.00 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $301,000 per year. If the part were purchased from the outside supplier, all of the direct labor cost of the part would be avoided. However, $23.40 of the fixed manufacturing overhead cost being applied to the part would continue even if the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company's remaining products.…NEED ANSWER
- Waterways mass-produces a special connector unit that it normally sells for $3.60. It sells approximately 31,700 of these units each year. The variable costs for each unit are $2.10. A company in Canada that has been unable to produce enough of a similar connector to meet customer demand would like to buy 16,500 of these units at $2.40 per unit. The production of these units is near full capacity at Waterways, so to accept the offer from the Canadian company would require temporarily adding another shift to its production line. To do this would increase variable manufacturing costs by $0.30 per unit. However, variable selling costs would be reduced by $0.20 a unit.An irrigation company has asked for a special order of 2,100 of the connectors. To meet this special order, Waterways would not need an additional shift, and the irrigation company is willing to pay $3.00 per unit.Guadalupe Olayo produces grandfather clocks. Each grandfather clock normally sells for $1,500. The following manufacturing cost information per clock is available: Direct materials are $200, labor is $600, variable overhead is $50, and fixed overhead is $40 (based on planned production for the year of 1,200 clocks). Commissions are 10% of selling price, and fixed selling and administrative costs are $70,000. Guadalupe’s tax rate is 25%. A European company has asked Guadalupe to accept a special order for 400 clocks. Due to some minor design changes, the material and labor costs for the special order clocks would increase by 25%. Another production run would have to be scheduled for the special order, since the clocks are different from the regular clocks, at a cost of $2,200. In addition, Guadalupe would have to hire a temporary clerk to process the ISO and export paperwork for shipping to Europe, at a cost of $600. Commissions will be paid at the rate of 5% of the special order…