TB MC Qu. 13-59 (Algo) Gallerani Corporation has received... Gallerani Corporation has received a request for a special order of 5,200 units of product A90 for $28.20 each. Product A90's unit product cost is $27.75, determined as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost 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 A90 that would increase the variable costs by $4.50 per unit and that would require an investment of $16,000 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. The annual financial advantage (disadvantage) for the company as a result of accepting this special order should be: Multiple Choice O O $(37,060) $6,880 $3.20 8.50 7.60 8.45 $27.75 $2,340

TB MC Qu. 13-59 (Algo) Gallerani Corporation has received... Gallerani Corporation has received a request for a special order of 5,200 units of product A90 for $28.20 each. Product A90's unit product cost is $27.75, determined as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost 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 A90 that would increase the variable costs by $4.50 per unit and that would require an investment of $16,000 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. The annual financial advantage (disadvantage) for the company as a result of accepting this special order should be: Multiple Choice O O $(37,060) $6,880 $3.20 8.50 7.60 8.45 $27.75 $2,340

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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John has received a special order for 100 units of its product at a special price of $2,100. The product normally sells for $2,800 and has the following manufacturing costs: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit cost Per unit $ 840 420 560 700 $2,52 0 Assume that John has sufficient capacity to fill the order without harming normal production and sales. If John accepts the order, what effect will the order have on the company's short-term profit?
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Wehrs Corporation has received a request for a special order of 9,800 units of product K19 for $47.50 each. The normal selling price of this product is $52.60 each, but the units would need to be modified slightly for the customer. The normal unit product cost of product K19 is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product.cost $ 18.30 7.60 4.80 7.70 $ 38.40 Direct labor is a varlable 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 K19 that would increase the variable costs by $7.20 per unit and that would require a one-time investment of $47,000 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. Required: Determine the effect on the company's total net…