Homework Help is Here – Start Your Trial Now!
Business
Accounting
What are the correct answers to questions 1 and 2?

What are the correct answers to questions 1 and 2?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
What are the correct answers to questions 1 and 2?
Suppose in the preceding question, all information is the same except that the present sale volume to regular customers is 4,000 liters. Should Z Company still accept the special order? Yes, because operating income would increase by P45,000.00. Yes, because operating income would increase by P9,000.00 No, because operating income would decrease by P4,000.00 * 1 p No, because operating income would be the same.
Transcribed Image Text:Suppose in the preceding question, all information is the same except that the present sale volume to regular customers is 4,000 liters. Should Z Company still accept the special order? Yes, because operating income would increase by P45,000.00. Yes, because operating income would increase by P9,000.00 No, because operating income would decrease by P4,000.00 * 1 p No, because operating income would be the same.
Z Company sells product called resin. It received a special order for 1,500 liters of resin from A, a valued client of Z Company. A asked for a 40% off of the regular selling price of P50.00 per liter. Pertinent data about the product resin are as follows: Normal plant capacity 5,000 liters Present sales volume to customers 3,500 liters Production costs: Materials Labor Factory overhead: variable fixed The special order will not require additional selling and administrative costs and the same will not affect regular sales. P6,000.00 profit P6,000.00 loss P15.00 per liter P5.00 per liter Question: Should Z Company accept the special order, how much would be the incremental profit using differential analysis? P9,000.00 profit P4.00 per liter P9,250.00 P9,000.00 loss
Transcribed Image Text:Z Company sells product called resin. It received a special order for 1,500 liters of resin from A, a valued client of Z Company. A asked for a 40% off of the regular selling price of P50.00 per liter. Pertinent data about the product resin are as follows: Normal plant capacity 5,000 liters Present sales volume to customers 3,500 liters Production costs: Materials Labor Factory overhead: variable fixed The special order will not require additional selling and administrative costs and the same will not affect regular sales. P6,000.00 profit P6,000.00 loss P15.00 per liter P5.00 per liter Question: Should Z Company accept the special order, how much would be the incremental profit using differential analysis? P9,000.00 profit P4.00 per liter P9,250.00 P9,000.00 loss
Expert Solution
steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Financial Statement Analysis
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.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS