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RM7.00. the new customer is geographically separated from N customers, and existing sales will not be affected. Nana Trading 82,000 units but plans to produce and sell only 65,000 in the normal sales price is RM12 per unit. Unit cost information is as RM Direct materials 3.10 Direct labor 2.25 Variable overhead 1.15 Fixed overhead 1.80 Total 8.30 Refer to the information above, if Nana Trading accepts th nanufacturing activities will be affected because there is sufficient Required: .What are the alternatives for Nana Trading? i. Should Nana Trading accept the special order? By how much or decrease if the order is accepted? ) Refer to the information for Nana Trading, suppose a custome company logo affixed to each paperweight using a label. N purchase a special logo labeling machine that will cost RM12 will be able to label the 15,000 units and then it will be scrapp value). No other fixed overhead activities will be incurred. In ad logo requires additional direct material of RMO 20

RM7.00. the new customer is geographically separated from N customers, and existing sales will not be affected. Nana Trading 82,000 units but plans to produce and sell only 65,000 in the normal sales price is RM12 per unit. Unit cost information is as RM Direct materials 3.10 Direct labor 2.25 Variable overhead 1.15 Fixed overhead 1.80 Total 8.30 Refer to the information above, if Nana Trading accepts th nanufacturing activities will be affected because there is sufficient Required: .What are the alternatives for Nana Trading? i. Should Nana Trading accept the special order? By how much or decrease if the order is accepted? ) Refer to the information for Nana Trading, suppose a custome company logo affixed to each paperweight using a label. N purchase a special logo labeling machine that will cost RM12 will be able to label the 15,000 units and then it will be scrapp value). No other fixed overhead activities will be incurred. In ad logo requires additional direct material of RMO 20

FINANCIAL ACCOUNTING
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 2 a) Nana Trading manufactures professional paperweights and has been approached by a new customer with an offer to purchase 15,000 units at a per unit price of RM7.00. the new customer is geographically separated from Nana Trading's other customers, and existing sales will not be affected. Nana Trading normally produces 82,000 units but plans to produce and sell only 65,000 in the coming year. The normal sales price is RM12 per unit. Unit cost information is as follows: RM Direct materials 3.10 Direct labor 2.25 Variable overhead 1.15 Fixed overhead 1.80 8.30 Total Refer to the information above, if Nana Trading accepts the order, no fixed manufacturing activities will be affected because there is sufficient excess capacity. Required: i. What are the alternatives for Nana Trading? ii. Should Nana Trading accept the special order? By how much will profit increase or decrease if the order is accepted? b) Refer to the information for Nana Trading, suppose a customer wants to have its company logo affixed to each paperweight using a label. Nana would have to purchase a special logo labeling machine that will cost RM12,000. The machine will be able to label the 15,000 units and then it will be scrapped (with no further value). No other fixed overhead activities will be incurred. In addition, each special logo requires additional direct material of RM0.20. Required: Should Nana Trading accept the special order? By how much will profit increase or decrease if the order is accepted?
Transcribed Image Text:Question 2 a) Nana Trading manufactures professional paperweights and has been approached by a new customer with an offer to purchase 15,000 units at a per unit price of RM7.00. the new customer is geographically separated from Nana Trading's other customers, and existing sales will not be affected. Nana Trading normally produces 82,000 units but plans to produce and sell only 65,000 in the coming year. The normal sales price is RM12 per unit. Unit cost information is as follows: RM Direct materials 3.10 Direct labor 2.25 Variable overhead 1.15 Fixed overhead 1.80 8.30 Total Refer to the information above, if Nana Trading accepts the order, no fixed manufacturing activities will be affected because there is sufficient excess capacity. Required: i. What are the alternatives for Nana Trading? ii. Should Nana Trading accept the special order? By how much will profit increase or decrease if the order is accepted? b) Refer to the information for Nana Trading, suppose a customer wants to have its company logo affixed to each paperweight using a label. Nana would have to purchase a special logo labeling machine that will cost RM12,000. The machine will be able to label the 15,000 units and then it will be scrapped (with no further value). No other fixed overhead activities will be incurred. In addition, each special logo requires additional direct material of RM0.20. Required: Should Nana Trading accept the special order? By how much will profit increase or decrease if the order is accepted?
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