Kapol Company's normal capacity is 60,000 units. Since the past few months, it has utilized only one half of this capacity. For last month, the result of its operations is summarized in the following statement: Sales (30,000 units) P 1,500,000 Less Variable Costs 600,000 Contribution Margin 900,000 Less fixed costs 500,000 Profit P 400,000 Of the variable and fixed costs shown on the statement, ¾ are manufacturing costs; the balance represents selling and administrative costs. This month, a customer submitted a proposal to buy 35,000 units of Kapol Company's product at P25 per unit. The only selling cost to be incurred for this order is P4.00 per unit representing freight charges that will be shouldered by Kapol. If this special order proves to be acceptable, Kapol is willing to reduce sales to regular customers so as not to exceed its normal capacity.

Kapol Company's normal capacity is 60,000 units. Since the past few months, it has utilized only one half of this capacity. For last month, the result of its operations is summarized in the following statement: Sales (30,000 units) P 1,500,000 Less Variable Costs 600,000 Contribution Margin 900,000 Less fixed costs 500,000 Profit P 400,000 Of the variable and fixed costs shown on the statement, ¾ are manufacturing costs; the balance represents selling and administrative costs. This month, a customer submitted a proposal to buy 35,000 units of Kapol Company's product at P25 per unit. The only selling cost to be incurred for this order is P4.00 per unit representing freight charges that will be shouldered by Kapol. If this special order proves to be acceptable, Kapol is willing to reduce sales to regular customers so as not to exceed its normal capacity.

Name: Kapol Company's normal capacity is 60,000 units. Since the past few m
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Description: Kapol Company's normal capacity is 60,000 units. Since the past few months, it has utilized only one halfof this capacity. For last month, the result of its operations is summarized in the following statement:Sales (30,000 units)P 1,500,000Less Vari

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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