Stryker Industries received an offer from an exporter for 25,000 units of product at $17 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price $22 Unit manufacturing costs: Variable 10 Fixed 6 What is the differential cost from the acceptance of the offer? a.$425,000 b.$550,000 c.$250,000 d.$150,000
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
33.
Use this information for Stryker Industries to answer the question that follow.
Stryker Industries received an offer from an exporter for 25,000 units of product at $17 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available:
| Domestic unit sales price | $22 |
| Unit |
|
| Variable | 10 |
| Fixed | 6 |
What is the differential cost from the acceptance of the offer?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
