s a single product for $33 per unit. At an operating level of 8,000 units, variable costs are $18 per unit and ice of $17 per unit on a special order of 2,000 units by Big Mart Discount Stores, which would use its own b unit than for regular production. However, special stamping equipment costing $3,000 would be needed s within the relevant range, prepare an analysis of differential revenue and costs to determine whether C r to only indicate a loss from special order; otherwise do not use negative signs with your answers.
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- Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Cutrate Furniture approached Jansen about buying 1,200 shelves for bookcases it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shell. The $1.50 per-shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320.000. However, the $130 packaging cost will not apply in this case. The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Based on this information, what would be the profit if Jansen accepts the special order? A. Profits will decrease by $1,200. B. Profits will increase by $31,200. C. Profits will increase by $600. D. Profits will increase by $7,200.Oat Treats manufactures various types of cereal bars featuring oats. Simmons Cereal Company has approached Oat Treats with a proposal to sell the company its top selling oat cereal bar at a price of $27,500 for 20,000 bars. The costs shown are associated with production of 20,000 oat bars currently. The manufacturing overhead consists of $3,000 of variable costs with the balance being allocated to fixed costs. Should Oat Treats make or buy the oat bars?Reubens Deli currently makes rolls for deli sandwiches it produces. It uses 30,000 rolls annually in the production of deli sandwiches. The costs to make the rolls are: A potential supplier has offered to sell Reuben the rolls for $0.90 each. If the rolls are purchased, 30% of the fixed overhead could be avoided, If Reuben accepts the offer, what will the effect on profit be?
- Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The cost of placing an order is 30. The cost of holding one unit of inventory for one year is 15.00. Currently, Ottis places 160 orders of 4,000 plastic housing units per year. Required: 1. Compute the economic order quantity. 2. Compute the ordering, carrying, and total costs for the EOQ. 3. How much money does using the EOQ policy save the company over the policy of purchasing 4,000 plastic housing units per order?This year, Hassell Company will ship 4,000,000 pounds of chocolates to customers with total order-filling costs of 900,000. There are two types of customers: those who order 50,000 pound lots (small customers) and those who order 250,000 pound lots (large customers). Each customer category is responsible for buying 1,500,000 pounds. The selling price per pound is 2 per lb for the 50,000 pound lot and 3 per lb for the larger lots, due to differences in the type of chocolate. ABC would likely assign order-filling costs to the customer type as follows: a. 450,000, small; 450,000, large (using pounds as the driver) b. 360,000, small; 540,000, large (using revenue as the driver) c. 750,000, small; 150,000, large (using number of orders as the driver) d. 450,000, small; 450,000, large (using customer type as the driver)Special OrderCarson Manufacturing, Inc., sells a single product for $33 per unit. At an operating level of 8,000 units, variable costs are $18 per unit and fixed costs $10 per unit. Carson has been offered a price of $17 per unit on a special order of 2,000 units by Big Mart Discount Stores, which would use its own brand name on the item. If Carson accepts the order, material cost will be $4 less per unit than for regular production. However, special stamping equipment costing $3,000 would be needed to process the order; the equipment would then be discarded. Assuming that volume remains within the relevant range, prepare an analysis of differential revenue and costs to determine whether Carson should accept the special order. Use a negative sign with answer to only indicate a loss from special order; otherwise do not use negative signs with your answers. Special Order Differential Analysis Differential revenue Differential variable costs Equipment cost…
- Carson Manufacturing, Inc., sells a single product for $34 per unit. At an operating level of 8,000 units, variable costs are $18 per unit and fixed costs $10 per unit. Carson has been offered a price of $18 per unit on a special order of 2,000 units by Big Mart Discount Stores, which would use its own brand name on the item. If Carson accepts the order, material cost will be $4 less per unit than for regular production. However, special stamping equipment costing $4,000 would be needed to process the order; the equipment would then be discarded. Assuming that volume remains within the relevant range, prepare an analysis of differential revenue and costs to determine whether Carson should accept the special order. Use a negative sign with answer to only indicate a loss from special order; otherwise do not use negative signs with your answers. Special Order Differential Analysis Differential revenue Answer Differential variable costs Answer Equipment cost Answer…A toaster is manufactured at a variable cost of $17 per unit, fixed costs of $8 per unit, and variable selling costs of $3 per unit, and normally sells at $40 per unit. The company receives a special-order request for 5,000 units and is willing to pay a price of $25 per unit. It will take an additional $2 per unit for special packaging of the product. Would you accept or reject the special order? Show your calculations, would accepting the order increase or decrease your net income? What other two factors will influence your decision.Special Order Carson Manufacturing, Inc., sells a single product for $36 per unit. At an operating level of 8,000 units, variable costs are $18 per unit and fixed costs $10 per unit. Carson has been offered a price of $20 per unit on a special order of 2,000 units by Big Mart Dis- count Stores, which would use its own brand name on the item. If Carson accepts the order, materials cost will be $3 less per unit than for regular production. However, special stamping equipment costing $4,000 would be needed to process the order; the equipment would then be discarded. Assuming that volume remains within the relevant range, prepare an analysis of differential revenue and costs to determine whether Carson should accept the special order.
- Dexter Company has been approached by a new customer with an offer to purchase 1,400 units of Dexter's product at a price of P3 each. The new customer is graphically separated from Dexter's other customers, and there would be no effect on existing sales. Dexter normally produces 10,000 units but only plans to produce and sell 8,000 in the coming year. The normal sales price is P5 per unit. Unit cost information is as follows: Direct materials P0.75 Direct labor 0.80 Variable overhead 0.40 Fixed Overhead 2.00 Total 3.95 If Dexter accepts the order, no fixed manufacturing activities will be affected because there is sufficient excess capacity. However, the distribution center at the warehouse is operating at full capacity and would need to add capacity costing P1,000 for every 5,000 units to be packed and shipped. BY HOW MUCH WILL PROFIT INCREASE/ DECREASE IF THE ORDER IS ACCEPTED?Sundial Company manufactures and sells watches for $44 each. Tick−Tock Company has offered Sundial $25 per watch for a one−time order of 5,700 watches. The total manufacturing cost per watch is $29 per unit and consists of variable costs of $21 per watch and fixed overhead costs of $8 per watch. Assume that Sundial has excess capacity and that the special pricing order would not adversely affect regular sales. What is the change in operating income that would result from accepting the special sales order? A. decrease of $22,800 B. increase of $22,800 C. increase of $142,500 D. decrease of $142,500Special Order Smooth Move Company 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 $7.00. The new customer is geographically separated from Smooth Move's other customers, and existing sales will not be affected. Smooth Move normally produces 85,000 units but plans to produce and sell only 65,000 in the coming year. The normal sales price is $15 per unit. Unit cost information is as follows: Direct materials $3.10 Direct labor 2.25 Variable overhead 1.15 Fixed overhead 1.80 Total $8.30 Suppose a customer wants to have its company logo affixed to each paperweight using a label. Smooth Move would have to purchase a special logo labeling machine that will cost $12,000. 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…