Use the following information for the Quick Study below. (Algo) [The following information applies to the questions displayed below.] Helix Company is approached by a new customer to provide 1,800 units of its product at a special price of $9 per unit. The normal selling price of the product is $11 per unit. Helix is operating at 80% of its capacity of 11,500 units. No incremental fixed overhead will be incurred because of this order. Also, there will be no incremental fixed general and administrative costs because of this order. QS 23-2 (Algo) Special offer LO P7 a. Special selling price of $9.00 per unit b. Direct materials of $2.00 per unit c. Direct labor of $3.00 per unit d. Variable overhead of $2.50 per unit e. Fixed overhead of $.75 per unit f. Fixed general and administrative costs of $.60 per unit Based on income, should Helix accept this new customer order at the special price?

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 3CMA: Aril Industries is a multiproduct company that currently manufactures 30,000 units of Part 730 each...
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Use the following information for the Quick Study below. (Algo)
[The following information applies to the questions displayed below.]
Helix Company is approached by a new customer to provide 1,800 units of its product at a special price of $9 per unit. The
normal selling price of the product is $11 per unit. Helix is operating at 80% of its capacity of 11,500 units. No incremental
fixed overhead will be incurred because of this order. Also, there will be no incremental fixed general and administrative
costs because of this order.
QS 23-2 (Algo) Special offer LO P7
a. Special selling price of $9.00 per unit
b. Direct materials of $2.00 per unit
c. Direct labor of $3.00 per unit
d. Variable overhead of $2.50 per unit
e. Fixed overhead of $.75 per unit
f. Fixed general and administrative costs of $.60 per unit
Based on income, should Helix accept this new customer order at the special price?
Sales
Variable costs
SPECIAL OFFER ANALYSIS
Direct materials
Direct labor
Variable overhead
Contribution margin
Fixed costs
Fixed overhead
Fixed general and administrative
$
4
Per Unit
11.00 $
(2.00)
(3.00)
(2.50)
3.50
(0.75)
(0.60)
215
Total
101,200
(18,400)
(27,600)
(23,000)
32,200
(6,900)
(5,520)
10 700
Transcribed Image Text:Use the following information for the Quick Study below. (Algo) [The following information applies to the questions displayed below.] Helix Company is approached by a new customer to provide 1,800 units of its product at a special price of $9 per unit. The normal selling price of the product is $11 per unit. Helix is operating at 80% of its capacity of 11,500 units. No incremental fixed overhead will be incurred because of this order. Also, there will be no incremental fixed general and administrative costs because of this order. QS 23-2 (Algo) Special offer LO P7 a. Special selling price of $9.00 per unit b. Direct materials of $2.00 per unit c. Direct labor of $3.00 per unit d. Variable overhead of $2.50 per unit e. Fixed overhead of $.75 per unit f. Fixed general and administrative costs of $.60 per unit Based on income, should Helix accept this new customer order at the special price? Sales Variable costs SPECIAL OFFER ANALYSIS Direct materials Direct labor Variable overhead Contribution margin Fixed costs Fixed overhead Fixed general and administrative $ 4 Per Unit 11.00 $ (2.00) (3.00) (2.50) 3.50 (0.75) (0.60) 215 Total 101,200 (18,400) (27,600) (23,000) 32,200 (6,900) (5,520) 10 700
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