Answered: Required: a. if arturito will accept…

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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a. if arturito will accept the special order, what is the incrementak benefit(loss)?

Transcribed Image Text:Arturito Company was approached by the Jordan Brand to purchase 10,000 pairs of shoes for P550. The company currently operates at 45,000 pairs. The maximum capacity of Arturito is 50,000 pairs. If arturito will accept the order, it will need to stop some of their operations. The shoes normally sell for P600. Costs pertaining to the production are as follows: Manufacturing costs are as follows: Direct material per unit P200 Direct labor per unit 180 21 Variable overhead per unit 50 Fixed overhead per unit 30 Period costs are as follows Variable selling costs P20 per unit Fixed administrative costs P450,000 If the company will accept the order: • It will not incur any selling costs. • Variable overhead of P12 per unit will not be incurred. • Exportation costs of P150,000 will be incurred.

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