The following data relate to M4 Engineering: Anticipated sales...... Normal sales price/unit.…............ Variable manufacturing cost/unit..... $10 Variable selling cost/unit............ Fixed manufacturing cost.......... ($8.00/unit) 100,000 units $32 $5 $800,000 $200,000 ($2.00/unit) Fixed selling cost .…..... Total cost/unit (full absorption)......... $25.00 M4 Engineering has the opportunity to take a one-time special order from a customer who wants to buy 20,000 units, but is only willing to pay $18.00 per unit. The special order will not affect M4's anticipated sales to other customers or the company's fixed costs. Should M4 Engineering accept the special order? Why or why not? Show your calculations.

The following data relate to M4 Engineering: Anticipated sales...... Normal sales price/unit.…............ Variable manufacturing cost/unit..... $10 Variable selling cost/unit............ Fixed manufacturing cost.......... ($8.00/unit) 100,000 units $32 $5 $800,000 $200,000 ($2.00/unit) Fixed selling cost .…..... Total cost/unit (full absorption)......... $25.00 M4 Engineering has the opportunity to take a one-time special order from a customer who wants to buy 20,000 units, but is only willing to pay $18.00 per unit. The special order will not affect M4's anticipated sales to other customers or the company's fixed costs. Should M4 Engineering accept the special order? Why or why not? Show your calculations.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Umstead Company provides the following information Targeted operating income $52.430 Selling price…

A: The contribution margin per unit is determined by subtracting variable cost per unit from the…

Q: Given the following: Units in beginning inventory...... Units produced. Units sold . 7,000 6,900 100…

A: Formula: Unit product cost = Direct materials + Direct labor + variable manufacturing overhead.

Q: Robeson Company estimates it will produce and sell 3,000 units next month. Data on costs follows:…

A: Direct materials Price variance = (SP - AP)*AQ = ($9 - $9.25)*1500 = $375 U

Q: andard material cost per kg of raw material is $8.75. Standard material allowed per unit is 6 Kg.…

A: Standard cost per output unit = Standard quantity × Standard price

Q: a. Prepare a full absorption costing income statement. ». Prepare a variable costing income…

A: Absorption costing is a method of costing .Under with this method all the costs are variable and…

Q: Snavely Inc, manufactures and sets two products Product t and Product AZ Data concemng the expected…

A: Overhead is an expense that can not be attributed to any product or service particularly but used to…

Q: S average costs per unit are as follows: Direct materials Direct labor Variable manufacturing…

A: PRODUCT COSTProduct Cost are those Cost which is associates with the Manufacturing of…

Q: The following is the behavior of Cost A: Units Average Produced Cost per Unit 500 1000 2000 3000 $4…

A: Variable Cost - Variable cost is the cost which is per unit fixed and vary with the level of…

Q: A company manufactures and sells soap. The direct material costs per unit is K2.00, the direct…

A: The contribution to sales ratio is like the slice of the revenue pie that remains after covering the…

Q: Product 1 £ Product 2 £ Product 3 £ Product 4 £ per kg/hour £ Direct materials(per kg) £ 13.14 £…

A: Variable cost:The cost which change with the change in the number of units is known as variable…

Q: 5. Consider the model of a firm that produces final goods using R&D and components as inputs, with…

A: The concept of components intensive can be used to measure the complexity and diversity of a…

Q: Mahaley, Inc, manufactures and sebs two products Product and Product FO. Data concening the expected…

A: The total cost is the sum total of direct material, direct labor, and manufacturing overhead.…

Q: Link Components plc manufactures 2 products for the manufacture of electric motor vehicles, X and Y.…

A: When a company produces more than one product, it faces many financial related decisions related to…

Q: Listen Selected information about Buehler Corporation's operations at high and at low levels of…

A: Variable cost is the cost that changes with change in the activity of cost driver used. The variable…

Q: ABC Company makes key chains. The total cost to make 1,000,000 key chains is as follows:…

A: A make-or-buy choice is an act of deciding whether to manufacture a product in-house or to purchase…

Q: The East Company manufactures several different products. Unit costs associated with Product ORD210…

A: The costs incurred for the production are classified as product and period costs. The period costs…

Q: For a company with the product portfolio in the Table, determine an aggregate unit and determine the…

A: Analyzing a company's product involves a thorough assessment of its features, quality, performance,…

Question

The following data relate to M4 Engineering:
Anticipated sales.…..........
100,000 units
Normal sales price/unit...........
Variable manufacturing cost/unit...... $10
Variable selling cost/unit............. $5
Fixed manufacturing cost.….............. $800,000
($8.00/unit)
$32
Fixed selling cost.
Total cost/unit (full absorption)....... $25.00
M4 Engineering has the opportunity to take a one-time
special order from a customer who wants to buy 20,000
units, but is only willing to pay $18.00 per unit. The
special order will not affect M4's anticipated sales to
other customers or the company's fixed costs.
$200,000 ($2.00/unit)
Should M4 Engineering accept the special order? Why or
why not? Show your calculations.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction:

VIEW

Step 2: Special order:

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

rr
A corporation's cost data is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Sales commissions Variable administrative expense Fixed selling and administrative expense What is the amount of product costs, if 4,000 units are produced? Multiple Choice O O O O $57,200 $8,800 $44,400 $53,200 Cost per Cost per Unit Period $ 6.00 $ 3.35 $ 1.75 $ 1.00 $ 0.40 $ 8,800 $ 4,000
show Total Period cost by using absorption costing.
Question 5: The Information below is taken from production department of Salalah Company for April: The number of units produced is 10060. All amounts are in OMR. |Total Costs |500000 Variable Cost ? | 400000 Fixed Cost |Direct material cost |Total labor cost |Manufacturing Overhead ? 100000 90000 30000 Calculate: A. Find the missing information in the above table. Some values may not be applicable, explain. B. Calculate cost per unit C. Describe the production costs in the equation form Y =f+ vX, D. Assume Salalah intends to produce 10000 units next month. Calculate total production costs for the month
The following data have been collected for four different cost items. Cost at Cost 100 Cost at Item units 140 units W $8,000 $10,560 X $5,000 $ 5,000 $6,500 $ 9,100 Z $6,700 $ 8,580 NAX Y Which of the following classifications of these cost items by cost behavior is correct? A) B) C) D) Cost W variable mixed variable mixed Cost X fixed fixed fixed fixed Cost Y mixed variable variable mixed Cost Z variable mixed variable mixed
Question 5 Using the following table a) construct the cost schedule for a firm operating in the short run Marginal Average Average Average Fixed Quantity- Total Total Total Production Fixed Variable Cost Cost Variable Total cost cost Cost Cost Cost $180 $180 --- --- ---- ---- 1 $200 2 $215 3 $225 4 $230 5 $240 $260 7 $295 8 $345 9 $405 b) Graph the average variable cost, average total cost and marginal cost curves.
10
Average Cost per Unit Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense $6.55 $3.45 $1.45 $3.80 $1.40 $0.95 $1.35 $0.85 Sales commissions Variable administrative expense If 7,300 units are sold, the variable cost per unit sold is closest to:
Subject:
how do I explain this? Metric Score Percent of Total Possible Contribution Margin 4.7 /5 Plant Utilization 5.0 /5 Days of Working Capital 5.0 /5 Stock-out Costs 5.0 /5 Inventory Carrying Costs 3.6 /5 Overall Score 23.3 /25