uTube Mapsapter 10 Homework i1: 1 of 2CseBookAskPrintFerencesw!1A!NewsRequired information[The following information applies to the questions displayed below.]Helix Company is approached by a new customer to provide 1,900 units of its product at a special price of $8 per unit. Thenormal selling price of the product is $10 per unit. Helix is operating at 80% of its capacity of 12,000 units. No incrementalfixed overhead will be incurred because of this order. Also, there will be no incremental fixed general and administrativecosts because of this order.F1Identify whether each of the following is relevant or not relevant to accepting this order.Itema. Special selling price of $8.00 per unitb. Direct materials of $2.00 per unitc. Direct labor of $3.00 per unitd. Variable overhead of $2.50 per unite. Fixed overhead of $0.70 per unitf. Fixed general and administrative costs of $0.60 per unit@Translate M SmartBook 2.0 M SmartBook 2.02WS-8°F2XBE C3E80F3MAR294aF4CR< Prev%5SavedF5VTG1 26tvF6of 11Y&7D F G HP⠀←Q NNext >F7U8N1DIIFBJDD9FOKAOF10

If the company has spare capacity for production, then it can accept the special order if it leads…

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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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Required information [The following information applies to the questions displayed below.] Benson Company makes and sells products with variable costs of $24 each. Benson incurs annual fixed costs of $352,800. The current sales price is $87. Note: The requirements of this question are interdependent. For example, the $252,000 desired profit introduced in Requirement c also applies to subsequent requirements. Likewise, the $80 sales price introduced in Requirement d applies to the subsequent requirements. d. If the sales price drops to $80 per unit, what level of sales is required to earn the desired profit? Express your answer in units an- dollars. Prepare an income statement using the contribution margin format. Complete this question by entering your answers in the tabs below. Reqlo1 If the sales price drops to $80 per unit, what level of sales is required to earn the desired profit? Express your answer in units and dollars. (Do not round intermediate calculations. Round your final…
The Colin Division of Crane Company sells its product for $30.00 per unit. Variable costs per unit include: manufacturing, $13.80; and selling and administrative, $4.00. Fixed costs are: $322000 manufacturing overhead, and $54000 selling and administrative. There was no beginning inventory. Expected sales for next year are 46000 units. Matthew Young, the manager of the Colin Division, is under pressure to improve the performance of the Division. As part of the planning process, he has to decide whether to produce 46000 units or 54000 units next year. What would the manufacturing cost per unit be under variable costing for each alternative? 46000 units 54000 units $13.80 $13.80 $17.80 $17.80 $19.55 $20.80 $20.80 $19.55
Novak Corporation has the excess manufacturing capacity to fill a special order from Nash, Inc. Using Novak's normal costing process, variable costs of the special order would be $26,700 and fixed costs would be $37400. Of the fixed costs, $7.700 would be for unavoidable overhead costs, and the remainder for rent onaspecial machine needed to complete the order. What is the minimum price Novak should quote to Nash? Minimum price
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Zion Manufacturing had always made its components in-house. However, Bryce Component Works had recently offered to supply one component, K2, at a price of $25 each. Zion uses 10 000 units of Component K2 each year. The cost per unit of this component is as follows: 1 Direct materials Direct labour Variable overhead Fixed overhead Total Refer to the information for Zion Manufacturing. The fixed overhead is an allocated expense; none of it would be eliminated if production of Component K2 stopped. Required: 2 3 $12.00 8.25 4.50 2.00 $26.75 What are the alternatives facing Zion Manufacturing with respect to production of Component K2? List the relevant costs for each alternative. If Zion decides to purchase the component from Bryce, by how much will operating income increase or decrease? Which alternative is better?
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Holly Corp. has received a request for a special order of 9,000 units of product Z74 for $46.50 each. The normal selling price of this product is $51.60 each, but the units would need to be modified slightly for the customer. The normal unit product cost of product Z74 is computed as follows: Direct materials.. $17.30 Direct labor. 6.60 Variable manufacturing overhead... Fixed manufacturing overhead Unit product cost... 3.80 6.70 $34.40 Direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like some modifications made to product Z74 that would increase the variable costs by $6.20 per unit and that would require a one-time investment of $46,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. Determine the effect on total net operating income of…
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Liguanea Pharmaceuticals Limited (LPL) currently sells a product the “sovereign” for $2200. This price is based on annual demand. Analysis indicates that if the company increase the price by $100 annual demand will fall by 400 units. At the current price 4,000 units are demanded. The product has the following cost structure per unit: Direct material $225 Direct labour $75 Direct expenses $150 Variable overheads $90 Fixed overheads $300 Variable selling expense $60 Fixed selling expenses $450 Management wants to know the optimal production quantity and its maximum profits. Determine the price equation Determine the optimal price and quantity Determine the optimal profits.
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A customer has requested that Lewelling Corporation fill a special order for 2,700 units of product S47 for $33 a unit. While the product would be modified slightly for the special order, product S47's normal unit product cost is $18.40: Direct materials $ 5.10 Direct labor 4.00 Variable manufacturing overhead 2.20 Fixed manufacturing overhead 7.10 Unit product cost $ 18.40 Assume that direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product S47 that would increase the variable costs by $1.40 per unit and that would require an investment of $17,000.00 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. The annual financial advantage (disadvantage) for the company as a result of…

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