Answered: Would your answer be different in part…

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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Question

Whispering Winds Inc. has been manufacturing capacity, and variable manufacturing and direct labour costs per unit to make the A supplier offers to make the lampshades

per year.

variable manufacturing costs will be

its own shades for its table lamps. The company is currently operating at 100% of overhead is charged to production at the rate of 50% of direct labour costs. The direct materials lampshades are $4.70 and $5.60, respectively. Normal production is 48,800 table lamps at a price of $13.50 per unit. If Whispering Winds Inc. accepts the supplier's offer all eliminated, but the $41.300 of fixed manufacturing overhead currently being charged to the lampshades will have to be absorbed by other products

(c)
Would your answer be different in part (b) if the productive capacity released by not making the lampshades could be used to
produce income of $33,720?
income would
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by $

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