Jones Products manufactures and sells to wholesalers approximately 200,000 packages per year of underwater markers at $3.84 per package. Annual costs for the production and sale of this quantity are shown in the table. Direct materials$256,000 Direct labor 64,000 Overhead 192,000 Selling expenses 80,000 Administrative expenses 53,000 Total costs and expenses$645,000 A new wholesaler has offered to buy 33,000 packages for $3.37 each. These markers would be marketed under the wholesaler’s name and would not affect Jones Products’s sales through its normal channels. A study of the costs of this additional business reveals the following: Direct materials costs are 100% variable.Per unit direct labor costs for the additional units would be 50% higher than normal because their production would require overtime pay at 1½ times the usual labor rate.25% of the normal annual overhead costs are fixed at any production level from 150,000 to 300,000 units. The remaining 75% of the annual overhead costs are variable with volume.Accepting the new business would involve no additional selling expenses.Accepting the new business would increase administrative expenses by a $3,000 fixed amount.Required:Complete the three-column comparative income statement that shows the following. (Round your intermediate calculations and per unit cost answers to 3 decimals.) 2. Annual operating Income recelved from the new buslne3. Combined annual operating Income from normal business and the new business.TotalPer Unit AmountNonnalVolumeNormalVolumeCombinedNew BusinessNew BusinessSalesVariable costs:0.0000.000Fixed costs:0.Prev1 of 7Next4111.Jpg144070491 15826..jpg143766274 69038..jpg144204505here to searchO # Cn

Special order decisions When deciding the price of products, a company will want to ensure that all…

Answered: Jones Products manufactures and sells…

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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Jones Products manufactures and sells to wholesalers approximately 200,000 packages per year of underwater markers at $3.84 per package. Annual costs for the production and sale of this quantity are shown in the table.


Direct materials	$	256,000
Direct labor		64,000
Overhead		192,000
Selling expenses		80,000
Administrative expenses		53,000
Total costs and expenses	$	645,000

A new wholesaler has offered to buy 33,000 packages for $3.37 each. These markers would be marketed under the wholesaler’s name and would not affect Jones Products’s sales through its normal channels. A study of the costs of this additional business reveals the following:

Direct materials costs are 100% variable.
Per unit direct labor costs for the additional units would be 50% higher than normal because their production would require overtime pay at 1½ times the usual labor rate.
25% of the normal annual overhead costs are fixed at any production level from 150,000 to 300,000 units. The remaining 75% of the annual overhead costs are variable with volume.
Accepting the new business would involve no additional selling expenses.
Accepting the new business would increase administrative expenses by a $3,000 fixed amount.

Required:
Complete the three-column comparative income statement that shows the following. (Round your intermediate calculations and per unit cost answers to 3 decimals.)

2. Annual operating Income recelved from the new buslne
3. Combined annual operating Income from normal business and the new business.
Total
Per Unit Amount
Nonnal
Volume
Normal
Volume
Combined
New Business
New Business
Sales
Variable costs:
0.000
0.000
Fixed costs:
0.
Prev
1 of 7
Next
4111.Jpg
144070491 15826..jpg
143766274 69038..jpg
144204505
here to search
O # Cn

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