SalesVariable costsSpecial Offer AnalysisDirect materialsDirect laborVariable overheadContribution marginFixed costsFixed overheadFixed general and administrativeIncome (loss)3333Per Unit7.00 $1.640.560.604.200.200.153.85*>Total4,200.000984,000336,000360,0002,520,000120,00090,0002,310,000 JART manufactures and sells underwater markers. Its contribution margin income statement follows.Contribution Margin Income StatementFor Year Ended December 31Annual TotalSales (600,000 units)Variable costsPer Unit$ 7.00$ 4,200,000Direct materialsDirect labor984,0001.640.56336,000Variable overhead0.60360,000Contribution marginFixed costs4.202,520,000Fixed overhead0.20Fixed general and administrative120,00090,0000.15Income$ 3.85$ 2,310,000A potential customer offers to buy 70,000 units for $3.60 each. These sales would not affect the company's sales through its normalchannels. Details about the special offer follow• Direct materials cost per unit and variable overhead cost per unit would not change.. Direct labor cost per unit would be $0.71 because the offer would require overtime pay,Accepting the offer would require incremental fixed general and administrative costs of $7,000Accepting the offer would require no incremental fixed overhead costsRequired:1. Compute income from the special offer.2. Should the company accept or reject the special offer?

Name: SalesVariable costsSpecial Offer AnalysisDirect materialsDirect labor
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Description: SalesVariable costsSpecial Offer AnalysisDirect materialsDirect laborVariable overheadContribution marginFixed costsFixed overheadFixed general and administrativeIncome (loss)3333Per Unit7.00 $1.640.560.604.200.200.153.85*>Total4,200.000984,000336,0

Special offers should be done at minimum charge of incremental cost if we have idle capacity.…

Business

Accounting

JART manufactures and sells underwater markers. Its contribution margin income statement follows. Contribution Margin Income Statement For Year Ended December 31 Per Unit $7.00 Annual Total $ 4,200,000 Sales (600,000 units) Variable costs Direct materials Direct labor Variable overhead 1.64 954,000 0.56 336,000 0.60 360,000 Contribution margin Fixed costs 4.20 2,520,000 Fixed overhead 0.20 120,000 90,000 Fixed general and administrative 0.15 Income $ 3.85 $ 2,310,000 A potential customer offers to buy 70,000 units for $3.60 each. These sales would not affect the company's sales through m channels. Details about the special offer follow • Direct materials cost per unit and variable overhead cost per unit would not change. . Direct labor cost per unit would be $0.71 because the offer would require overtime pay .Accepting the offer would require incremental fixed general and administrative costs of $7,000 . Accepting the offer would require no incremental fixed overhead costs Required: 1. Compute income from the special offer 2. Should the company accept or reject the special offer?

JART manufactures and sells underwater markers. Its contribution margin income statement follows. Contribution Margin Income Statement For Year Ended December 31 Per Unit $7.00 Annual Total $ 4,200,000 Sales (600,000 units) Variable costs Direct materials Direct labor Variable overhead 1.64 954,000 0.56 336,000 0.60 360,000 Contribution margin Fixed costs 4.20 2,520,000 Fixed overhead 0.20 120,000 90,000 Fixed general and administrative 0.15 Income $ 3.85 $ 2,310,000 A potential customer offers to buy 70,000 units for $3.60 each. These sales would not affect the company's sales through m channels. Details about the special offer follow • Direct materials cost per unit and variable overhead cost per unit would not change. . Direct labor cost per unit would be $0.71 because the offer would require overtime pay .Accepting the offer would require incremental fixed general and administrative costs of $7,000 . Accepting the offer would require no incremental fixed overhead costs Required: 1. Compute income from the special offer 2. Should the company accept or reject the special offer?

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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Sales volume (units) Revenue Variable costs Direct materials Direct labor Contribution margin Fixed costs Profit $30,000 $2.00 $45,000 Use direct labor dollars as the cost driver. Compute allocated fixed costs for Product X: O $20,000 Product X 400 $60,000 $50,000 $25,000 $15,000 $20,000 Product Y 600 $60,000 $15,000 $10,000 $35,000 Total 1,000 $120,000 $40,000 $25,000 $55,000 $50,000 $5,000
Farrow Company reports the following annual results. Contribution Margin Income Statement Per Unit Annual Total Sales (240,000 units) $ 15.00 $ 3,600,000 Variable costs Direct materials 2.00 480,000 Direct labor 4.00 960,000 Overhead 2.50 600,000 Contribution margin 6.50 1,560,000 Fixed costs Fixed overhead 2.00 480,000 Fixed general and administrative 1.50 360,000 Income $ 3.00 $ 720,000 The company receives a special offer for 24,000 units at $12 per unit. The additional sales would not affect its normal sales. Variable costs per unit would be the same for the special offer as they are for the normal units. The special offer would require incremental fixed overhead of $96,000 and incremental fixed general and administrative costs of $103,000. (a) Compute the income or loss for the special offer.(b) Should the company accept or reject the special offer? Compute the income or loss for the special offer. (Round your "Per Unit" answers to 2…
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Prime Cost, Conversion Cost, Preparation of Income Statement: Manufacturing Firm Kildeer Company makes easels for artists. During the last calendar year, a total of 34,000 easels were made, and 35,000 were sold for $52 each. The actual unit cost is as follows: Direct materials Direct labor Variable overhead Fixed overhead Total unit cost Required: $15.00 6.00 Ending units Dollar amount 4.00 14.00 The selling expenses consisted of a commission of $0.90 per unit sold and advertising co-payments totaling $94,500. Administrative expenses, all fixed, equaled $176,500. There were no beginning and ending work-in-process inventories. Beginning finished goods inventory was $109,200 for 2,800 easels. $39.00 1. Calculate the number and the dollar value of easels in ending finished goods inventory. 1,800 ✓ 70,200 2. Prepare a cost of goods sold statement. Kildeer Company Statement of Cost of Goods Sold For the Year Ended December 31 Cost of goods manufactured Add: Beginning finished goods…
Subject: accounting
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