Cost Accounting (15th Edition)
Cost Accounting (15th Edition)
15th Edition
ISBN: 9780133428704
Author: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
Question
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Chapter 19, Problem 19.32P
To determine

Whether the introduction of new product is beneficial for S.

Given information:

Selling price per order of Z39 is $26,500.

Number of orders of Z39 is 50 orders.

Variable cost per order of Z39 is $15,000.

Total manufacturing hours per order of Z39 are 410 hours.

Inventory carrying cost per order of Z39 is $0.75.

Selling price per order of Y28 is $6,000.

Number of orders of Y28 is 25 orders.

Variable cost per order of Y28 is $5,000.

Total manufacturing hours per order of Y28 are 350 hours.

Inventory carrying cost per order of Y28 is $0.25.

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