Marigold Company is a leading manufacturer of sunglasses. One of Marigold's products protects the eyes from ultraviolet rays. An upscale sporting goods store has contacted Marigold about purchasing 28,900 pairs of these sunglasses. Marigold's unit manufacturing cost, based on a full capacity of 244,000 units, is as follows: Direct materials Direct labor Manufacturing overhead (75% fixed) Total manufacturing costs $6 Marigold's income will 4 27 $37 Marigold also incurs selling and administrative expenses of $74,400 plus $2 per pair for sales commissions. The company has plenty of excess manufacturing capacity to use in manufacturing the sunglasses. Marigold's normal price for these sunglasses is $40 per pair. The sporting goods store has offered to pay $32 per pair. Since the special order was initiated by the sporting goods store, no sales commission will be paid. What would be the effect on Marigold's income if the special order were accepted? by $

Marigold Company is a leading manufacturer of sunglasses. One of Marigold's products protects the eyes from ultraviolet rays. An upscale sporting goods store has contacted Marigold about purchasing 28,900 pairs of these sunglasses. Marigold's unit manufacturing cost, based on a full capacity of 244,000 units, is as follows: Direct materials Direct labor Manufacturing overhead (75% fixed) Total manufacturing costs $6 Marigold's income will 4 27 $37 Marigold also incurs selling and administrative expenses of $74,400 plus $2 per pair for sales commissions. The company has plenty of excess manufacturing capacity to use in manufacturing the sunglasses. Marigold's normal price for these sunglasses is $40 per pair. The sporting goods store has offered to pay $32 per pair. Since the special order was initiated by the sporting goods store, no sales commission will be paid. What would be the effect on Marigold's income if the special order were accepted? by $

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 1MC: Active Frame, Inc., manufactures clear and tinted sport glasses. The manufacturing of clear glasses...

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Marvel Parts, Incorporated, manufactures auto accessories.One of the company's products is a set of seat covers that can be adjusted to fit nearly any small car. The company uses a standard cost system for all of its products. According to the standards that have been set for the seat covers, the factory should work 2, 850 hours each month to produce 1,900 sets of covers. The standard costs associated with this level of production are: Total Per Set of Covers Direct materials $ 42, 560 $ 22.40 Direct labor $ 51,300 27.00 Variable manufacturing overhead (Training Training hing based on direct labor-hours) $ 6,840 3.60 $ 53.00 During August, the factory worked only 2, 800 direct labor-hours and produced 2,000 sets of covers. The following actual costs were recorded during the month: Total Per Set of Covers Direct materials (12, 000 yards) $ $ 45,600 $ 22.80 Direct labor $ 49,000 24.50 Variable manufacturing overhead $ 7,000 3.50 $ 50.80 At standard, each set of covers should require 5.6…
Marvel Parts, Incorporated, manufactures auto accessories. One of the company’s products is a set of seat covers that can be adjusted to fit nearly any small car. The company uses a standard cost system for all of its products. According to the standards that have been set for the seat covers, the factory should work 2,850 hours each month to produce 1,900 sets of covers. The standard costs associated with this level of production are: Total Per Set of Covers Direct materials $ 42,560 $ 22.40 Direct labor $ 51,300 27.00 Variable manufacturing overhead (based on direct labor-hours) $ 6,840 3.60 $ 53.00 During August, the factory worked only 2,800 direct labor-hours and produced 2,000 sets of covers. The following actual costs were recorded during the month: Total Per Set of Covers Direct materials (12,000 yards) $ 45,600 $ 22.80 Direct labor $ 49,000 24.50 Variable manufacturing overhead $ 7,000 3.50 $ 50.80 At standard, each set of covers…