Special OrderTobitzu TV produces wall mounts for flat panel television sets. The forecasted income statement for 2009 is as follows:TOBITZU TVBudgeted Income StatementFor the Year 2009Sales ($41 per unit)$4,100,000Cost of good sold ($32 per unit) (3,200,000)Gross profit900,000Selling expenses ($2 per unit)(200,000)Net income$700,000Additional Information(1) Of the production costs and selling expenses, $700,000 and $100,000, respectively, are fixed. (2) Tobitzu TV received a special order from a hospital supply company offering to buy 14,000 wall mounts for $29. If it accepts theorder, there will be no additional fixed selling expenses, and there is currently sufficient excess capacity to fill the order. The company's sales manager argues for rejecting the order because "we are not in the business of paying$32 to make a product to sell for $29."Do you think the company should accept the special order?Compute the contribution per unit and total contribution for the special order.Contribution per unit. Note: Round answer to two decimal places.$ 4Total contribution$56,000

Operating income is a financial reporting figure that represents the amount of profit generated by a…

/ produces wall mounts for flat panel television sets. The forecasted income statement for 2009 is as follows: TOBITZU TV geted Income Statement For the Year 2009 per unit) od sold ($32 per unit) (3,200.000) $4,100,.000 it 900.000 enses ($2 per unit) (200.000) 5700.000 I Information production costs and selling expenses, $700,000 and $100,000, respectively, are fixed. (2) Tobitzu TV received a special ere will be no additional fixed selling expenses, and there is currently sufficient excess capacity to fill the order. The com ake a product to sell for $29." ink the company should accept the special order? the contribution per unit and total contribution for the special order. ion per unit. Note: Round answer to two decimal places.

/ produces wall mounts for flat panel television sets. The forecasted income statement for 2009 is as follows: TOBITZU TV geted Income Statement For the Year 2009 per unit) od sold ($32 per unit) (3,200.000) $4,100,.000 it 900.000 enses ($2 per unit) (200.000) 5700.000 I Information production costs and selling expenses, $700,000 and $100,000, respectively, are fixed. (2) Tobitzu TV received a special ere will be no additional fixed selling expenses, and there is currently sufficient excess capacity to fill the order. The com ake a product to sell for $29." ink the company should accept the special order? the contribution per unit and total contribution for the special order. ion per unit. Note: Round answer to two decimal places.

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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Question

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Special Order
Tobitzu TV produces wall mounts for flat panel television sets. The forecasted income statement for 2009 is as follows:
TOBITZU TV
Budgeted Income Statement
For the Year 2009
Sales ($41 per unit)
$4,100,000
Cost of good sold ($32 per unit) (3,200,000)
Gross profit
900,000
Selling expenses ($2 per unit)
(200,000)
Net income
$700,000
Additional Information
(1) Of the production costs and selling expenses, $700,000 and $100,000, respectively, are fixed. (2) Tobitzu TV received a special order from a hospital supply company offering to buy 14,000 wall mounts for $29. If it accepts the
order, there will be no additional fixed selling expenses, and there is currently sufficient excess capacity to fill the order. The company's sales manager argues for rejecting the order because "we are not in the business of paying
$32 to make a product to sell for $29."
Do you think the company should accept the special order?
Compute the contribution per unit and total contribution for the special order.
Contribution per unit. Note: Round answer to two decimal places.
$ 4
Total contribution
$56,000

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