My former colleague, who is the COO at Ferris, just informed me that they are looking to sell excess capacity. This usually indicates lagging sales and a company's need for additional cash. Ferris wants to sell 100 units (x1000) of capacity used for the Fist product line. Each unit of capacity is worth $5 plus $3 per the automation rating. I also know that Ferris is offering a 33.5% discount on capacity purchase. I'm looking to assess the impact of selling this excess capacity on Ferris, as our products often compete with theirs. Could you tell me how much Ferris would receive when the capacity is sold? Sincerely, Louis Louis Devries Board Member, Operations | Andrews Corporation O $1,729,000 O $871,000 O $1,300,000 O $2,600,000
My former colleague, who is the COO at Ferris, just informed me that they are looking to sell excess capacity. This usually indicates lagging sales and a company's need for additional cash. Ferris wants to sell 100 units (x1000) of capacity used for the Fist product line. Each unit of capacity is worth $5 plus $3 per the automation rating. I also know that Ferris is offering a 33.5% discount on capacity purchase. I'm looking to assess the impact of selling this excess capacity on Ferris, as our products often compete with theirs. Could you tell me how much Ferris would receive when the capacity is sold? Sincerely, Louis Louis Devries Board Member, Operations | Andrews Corporation O $1,729,000 O $871,000 O $1,300,000 O $2,600,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please don't give image format
Transcribed Image Text:My former colleague, who is the COO at Ferris, just informed me that they are looking to sell excess capacity. This usually
indicates lagging sales and a company's need for additional cash. Ferris wants to sell 100 units (x1000) of capacity used for
the Fist product line. Each unit of capacity is worth $5 plus $3 per the automation rating. I also know that Ferris is offering a
33.5% discount on capacity purchase. I'm looking to assess the impact of selling this excess capacity on Ferris, as our
products often compete with theirs. Could you tell me how much Ferris would receive when the capacity is sold?
Sincerely,
Louis
Louis Devries
Board Member, Operations | Andrews Corporation
O $1,729,000
O $871,000
O $1,300,000
$2,600,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 6 images
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education