North Network Sdn. Bhd. (NNSB) is producing pen, named Nano-XFine. In producing a unit of Nano-XFine that normally sells for RM45 each, it costs RM30 per unit (RM20 variable and RM10 fixed). Recently, a foreign wholesaler offers to buy 4,000 units Nano-XFine at RM23 each. NNSB will incur special shipping costs of RM1 per unit Nano-XFine. It is assumed that NNSB has excess operating capacity. A. REQUIRED: Analyze the offer made and suggest whether NNSB should accept it. Show all your calculations.
North Network Sdn. Bhd. (NNSB) is producing pen, named Nano-XFine. In producing a unit of Nano-XFine that normally sells for RM45 each, it costs RM30 per unit (RM20 variable and RM10 fixed). Recently, a foreign wholesaler offers to buy 4,000 units Nano-XFine at RM23 each. NNSB will incur special shipping costs of RM1 per unit Nano-XFine. It is assumed that NNSB has excess operating capacity. A. REQUIRED: Analyze the offer made and suggest whether NNSB should accept it. Show all your calculations.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![North Network Sdn. Bhd. (NNSB) is producing pen, named Nano-XFine. In producing
a unit of Nano-XFine that normally sells for RM45 each, it costs RM30 per unit (RM20
variable and RM10 fixed). Recently, a foreign wholesaler offers to buy 4,000 units
Nano-XFine at RM23 each. NNSB will incur special shipping costs of RM1 per unit
Nano-XFine. It is assumed that NNSB has excess operating capacity.
А.
REQUIRED:
Analyze the offer made and suggest whether NNSB should accept it. Show all your
calculations.
Muhammad Teamwork Sdn. Bhd. (MTSB) makes unfinished bookcases that is sold for
RM60 each. Production costs per unit are RM30 variable and RM10 fixed respectively.
Due to the unused capacity, MTSB is considering of processing further the unfinished
bookcases which it can sell for RM70 each. Variable finishing costs are expected to be
RM6 per unit with no increase in fixed costs.
REQUIRED:
(a)
Prepare the incremental analysis on per unit basis showing whether MTSB
should sell unfinished bookcases or process it further.
(b)
Based on your analysis, what decision should the management make? Explain.
B.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fecdf5223-e286-4404-b46a-d067c1f07bd5%2F93653656-b6e0-4504-a988-2bfecb316b59%2Fi2v6t6o_processed.png&w=3840&q=75)
Transcribed Image Text:North Network Sdn. Bhd. (NNSB) is producing pen, named Nano-XFine. In producing
a unit of Nano-XFine that normally sells for RM45 each, it costs RM30 per unit (RM20
variable and RM10 fixed). Recently, a foreign wholesaler offers to buy 4,000 units
Nano-XFine at RM23 each. NNSB will incur special shipping costs of RM1 per unit
Nano-XFine. It is assumed that NNSB has excess operating capacity.
А.
REQUIRED:
Analyze the offer made and suggest whether NNSB should accept it. Show all your
calculations.
Muhammad Teamwork Sdn. Bhd. (MTSB) makes unfinished bookcases that is sold for
RM60 each. Production costs per unit are RM30 variable and RM10 fixed respectively.
Due to the unused capacity, MTSB is considering of processing further the unfinished
bookcases which it can sell for RM70 each. Variable finishing costs are expected to be
RM6 per unit with no increase in fixed costs.
REQUIRED:
(a)
Prepare the incremental analysis on per unit basis showing whether MTSB
should sell unfinished bookcases or process it further.
(b)
Based on your analysis, what decision should the management make? Explain.
B.
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