The Lamar Company manufactures wiring tools. The company is currently producing well below its full capacity. The Boston Company has approached Lamarwith an offer to buy 15,000 tools at $1.80 each. Lamar sells its tools wholesale for $1.90 each; the average cost per unit is $1.88, of which $0.32 is fixed costs. IfLamar were to accept Boston's offer, what would be the increase in Lamar's operating profits?Multiple ChoiceOO$1,500.$5,100.$1,200.$3,600.

In decision making process we consider only incremental cost. Incremental cost includes variable…

Answered: The Lamar Company manufactures wiring…

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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Flanders Manufacturing is considering purchasing a new machine that will reduce variable costs per part produced by $0.15. The machine will increase fixed costs by $16,500 per year. The information they will use to consider these changes is shown here. A. What will the impact be on the break-even point if Flanders purchases the new machinery? Round per unit cost answers to two decimal places. Current New Machine Units Sold 221,000 fill in the blank 1 Sales Price Per Unit $2.10 $fill in the blank 2 Variable Cost Per Unit $1.75 $fill in the blank 3 Contribution Margin Per Unit $0.35 $fill in the blank 4 Fixed Costs $45,500 $fill in the blank 5 Break-Even (in units) 130,000 fill in the blank 6 Break-Even (in dollars) $273,000 $fill in the blank 7 B. What will the impact be on net operating income if Flanders purchases the new machinery? Current New Machine Sales $464,100 $fill in the blank 8 Variable Costs 386,750 fill in the blank 9 Contribution Margin…
Two alternative locations are under consideration for a new plant: Jackson, Mississippi, and Dayton, Ohio. The Jackson location is superior in terms of costs. However, management believes that sales volume would decline if this location were chosen because it is farther from the market, and the firm's customers prefer local suppliers. The selling price of the product is $350 per unit in either case. Use the following information to determine which location yields the higher total profit per year: Location Jackson Dayton The annual profit from Jackson is $ Annual Fixed Cost $2,100,000 $3,000,000 Variable Cost per Unit 45 $95 Forecasted Demand per Year 35,000 units 39,000 units (Enter your response as an integer.) ..
[The following information applies to the questions displayed below.] Charlevoix Cases makes mobile phone cases. The company has collected the following price and cost characteristics: Sales price Variable costs Fixed costs $ 12.00 per case 5.50 per case 391,950 per year Assume that the company plans to sell 75,300 units annually. Consider requirements (b), (c), and (d) independently of each other. Required: a. What will be the operating profit? b. What is the impact on operating profit if the sales price decreases by 20 percent? Increases by 10 percent? Note: Do not round intermediate calculations. c. What is the impact on operating profit if variable costs per unit decrease by 20 percent? Increase by 10 percent? Note: Do not round intermediate calculations. d. Suppose that fixed costs for the year are 20 percent lower than projected and variable costs per unit are 20 percent higher tha projected. What impact will these cost changes have on operating profit for the year? Will profit…
5. A supplier has offered us 1200 pounds of filberts for $950. Should these filberts be purchased? If yes, how much would profits increase? Need explanation for the answer please
To be profitable, a firm must recover its costs. These costs include both its fixed and its variable costs. One way that a firm evaluates at what stage it would recover the invested costs is to calculate how many units or how much in dollar sales is necessary for the firm to earn a profit. Consider the case of Blue Mouse Manufacturers: Blue Mouse Manufacturers is considering a project that will have fixed costs of $10,000,000. The product will be sold for $37.50 per unit, and will incur a variable cost of $11.25 per unit. Given Blue Mouse’s cost structure, it will have to sell units to break even on this project (QBEQBE).
J.W. Electronics sells one of its Toshiba 43" 1080p LED TV for $370 The fixed cost for producing this type of TV is $166500. The variable cost per unit is $185 Based on the above information, what is the break-even point in units? Show your calculations. The competition has reduced its price on a similar TV to $310. J.W. Electronics is considering reducing its selling price to $310 to compete. Find the new break-even b point if the sales price is reduced to $310. Show your calculations Calculate the profit realized by J.W. Electronics on the sale of 2500 TVs if it keeps its selling price at $370. Show your calculations.
Current Attempt in Progress Your answer is partially correct. Cullumber Company incurs a cost of $35 per unit, of which $19 is variable, to make a product that normally sells for $58. A foreign wholesaler offers to buy 5,600 units at $30 each. Cullumber will incur additional costs of $1 per unit to imprint a logo and to pay for shipping. Compute the increase or decrease in net income Cullumber will realize by accepting the special order, assuming Cullumber has sufficient excess operating capacity. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Revenues Costs $ Net income $ Reject $ $ Should Cullumber Company accept the special order? Cullumber company should accept V the special order. Accept 168000 112000 i 56000 $ $ Net Income Increase (Decrease) 168000 112000 56000
This-Test-Is-a-Breeze, Inc. owns a warehouse in Wilmington, DE. The company has decided to use the warehouse for the production of plastic polymers. To do so the company will forgo the option of renting the warehouse to a third party, which would have generated $50,000 of annual cash inflow. The $50,000 that the company is forgoing to pursue another investment is: Sunk Cost Opportunity Cost Erosion Cost Variable Cost
Pharoah Industries produces and sells electronic sound equipment. The company has production capacity of 20600 units and currently production schedule is for 18600 units. Each unit has a selling price of $25, variable product cost of $15, and variable selling cost of $2. Another division wishes to purchase 560 units. If Pharoah sells the units to the other division, it will avoid $1 of the variable selling costs. What is the minimum transfer price that will maximize corporate profits? $25 $15 $17 $16
Saran Company has contacted Truckel with an offer to sell it 5,000 of the wickets for $18 each. If Truckel makes the wickets, variable costs are $16 per unit. Fixed costs are $8 per unit; however, $5 per unit is unavoidable. Should Truckel make or buy the wickets? a. Buy; savings = $15,000 b. Buy; savings = $5,000 c. Make; savings = $10,000 d. Make; savings = $5,000
Please help me. Fast solution please. Thankyou.
5. What is the maximum price that Silven should be willing to pay the outside supplier for a box of 24 tubes? 6. Instead of sales of 130,000 boxes of tubes, revised estimates show a sales volume of 161,000 boxes of tubes. At this higher sales volume, Silven would need to rent extra equipment at a cost of $51,000 per year to make the additional 31,000 boxes of tubes. Assuming that the outside supplier will not accept an order for less than 161,000 boxes of tubes, what is the financial advantage (disadvantage) in total (not per box) if Silven buys 161,000 boxes of tubes from the outside supplier? Given this new information, should Silven Industries make or buy the tubes? 7. Refer to the data in Required 6. Assume that the outside supplier will accept an order of any size for the tubes at a price of $1.95 per box. How many boxes of tubes should Silven make? How many boxes of tubes should it buy from the outside supplier?

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