The Saluki Company specializes in making fraternity and sorority T-shirts for the college market. Due to the high setup costs for each batch printed, Saluki holds the T-shirt requests until demand is approximately 100 shirts. At that point Saluki will schedule the setup and production of the shirts. For rush orders, Saluki will produce smaller batches for an additional charge of $175 per setup. Budgeted and actual costs for the production process for 2017 were as follows: Static-Budget Amounts Number of shirts produced Average number of shirts per setup Hours to set up machines Direct variable cost per setup-hour Total fixed setup overhead costs Actual Results 114,000 95 5.20 2$ $56,000 125,000 $ 30 32 $56,250
The Saluki Company specializes in making fraternity and sorority T-shirts for the college market. Due to the high setup costs for each batch printed, Saluki holds the T-shirt requests until demand is approximately 100 shirts. At that point Saluki will schedule the setup and production of the shirts. For rush orders, Saluki will produce smaller batches for an additional charge of $175 per setup. Budgeted and actual costs for the production process for 2017 were as follows: Static-Budget Amounts Number of shirts produced Average number of shirts per setup Hours to set up machines Direct variable cost per setup-hour Total fixed setup overhead costs Actual Results 114,000 95 5.20 2$ $56,000 125,000 $ 30 32 $56,250
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
What qualitative factors should Saluki consider before accepting or rejecting a special order?
Transcribed Image Text:The Saluki Company specializes in making
fraternity and sorority T-shirts for the college market. Due to the high setup costs for each batch printed,
Saluki holds the T-shirt requests until demand is approximately 100 shirts. At that point Saluki will schedule
the setup and production of the shirts. For rush orders, Saluki will produce smaller batches for an additional
charge of $175 per setup.
Budgeted and actual costs for the production process for 2017 were as follows:
Static-Budget Amounts
Number of shirts produced
Average number of shirts per setup
Hours to set up machines
Direct variable cost per setup-hour
Total fixed setup overhead costs
Actual Results
114,000
95
5.20
2$
$56,000
125,000
$ 30
32
$56,250
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