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provide a profit. Presently, Vaughn is operating at 75% capacity and does not have any other potential buyers for Y-Go. If Vaughn accepts the CAF's offer, it will not incur any variable selling expenses for this order. ادا

provide a profit. Presently, Vaughn is operating at 75% capacity and does not have any other potential buyers for Y-Go. If Vaughn accepts the CAF's offer, it will not incur any variable selling expenses for this order. ادا

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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provide a profit. Presently, Vaughn is operating at 75% capacity and does not have any other potential buyers for Y-Go. If Vaughn accepts the CAF's offer, it will not incur any variable selling expenses for this order. (a) Your answer is partially correct. Using incremental analysis, determine whether Vaughn should accept the CAF's offer. (Round per unit calculations to 2 decimal places, e.g. 15.25 and final answers to O decimal places, e.g. 5,275.) Incremental revenue Incremental cost: Variable cost Incremental income $ LA 1056000 836000 1892000
Transcribed Image Text:provide a profit. Presently, Vaughn is operating at 75% capacity and does not have any other potential buyers for Y-Go. If Vaughn accepts the CAF's offer, it will not incur any variable selling expenses for this order. (a) Your answer is partially correct. Using incremental analysis, determine whether Vaughn should accept the CAF's offer. (Round per unit calculations to 2 decimal places, e.g. 15.25 and final answers to O decimal places, e.g. 5,275.) Incremental revenue Incremental cost: Variable cost Incremental income $ LA 1056000 836000 1892000
Vaughn is the creator of Y-Go, a technology that weaves silver into fabrics to kill bacteria and odour on clothing while managing heat. Y-Go has become very popular in undergarments for sports activities. Operating at capacity, the company can produce 1,000,000 Y-Go undergarments each year. The per-unit and total costs for the undergarment are as follows: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Total Per Undergarment $2.10 0.50 1.00 1.20 0.25 $5.05 Total $2,100,000 500,000 1,000,000 1,200,000 250,000 $5,050,000 The Canadian Armed Forces (CAF) has approached Vaughn and expressed an interest in purchasing 220,000 Y-Go undergarments for soldiers stationed in extremely warm climates. The CAF would pay the unit cost for direct materials, direct labour, and variable manufacturing overhead costs. In ddition, the CAF has agreed to pay an additional $1 per undergarment to cover all other costs and ovide a profit. Presently, Vaughn is operating at 75% capacity and does not have any other potential
Transcribed Image Text:Vaughn is the creator of Y-Go, a technology that weaves silver into fabrics to kill bacteria and odour on clothing while managing heat. Y-Go has become very popular in undergarments for sports activities. Operating at capacity, the company can produce 1,000,000 Y-Go undergarments each year. The per-unit and total costs for the undergarment are as follows: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Total Per Undergarment $2.10 0.50 1.00 1.20 0.25 $5.05 Total $2,100,000 500,000 1,000,000 1,200,000 250,000 $5,050,000 The Canadian Armed Forces (CAF) has approached Vaughn and expressed an interest in purchasing 220,000 Y-Go undergarments for soldiers stationed in extremely warm climates. The CAF would pay the unit cost for direct materials, direct labour, and variable manufacturing overhead costs. In ddition, the CAF has agreed to pay an additional $1 per undergarment to cover all other costs and ovide a profit. Presently, Vaughn is operating at 75% capacity and does not have any other potential
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