Concept Introduction:
Special Order: Special Order are the orders which company does not anticipate while preparing their budget for the year. These order are the special opportunity for the company to earn additional revenue.
Excess Capacity: The Excess production capacity is the capacity of machine to produce the extra product without harming the original production plans.
Variable Cost: The variable cost are the cost which is directly associated with output. This cost includes direct labour cost and material cost, etc.
Fixed Cost : Fixed Cost are the cost which is independent of output. It includes rental cost. This cost remains constant throughout the relevant range of output.
Requirement 1
To Prepare:
1. Differential analysis to show whether Hungry-Cardz to accept special sales order or not
Requirement 2
To Prepare:
1. Differential Analysis for Hungry Cardz to accept special order , if it involves fixed cost of $5,000
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Horngren's Accounting, The Financial Chapters (11th Edition) - Standalone Book
- The industrial enterprise "HUANG S.A." purchased a sorting and packaging machine from a foreign company on 1/4/2017 at a cost of €500,000. The useful life of the machine was estimated by the Management at ten (10) years, while the residual value was estimated at zero. For the transportation of the machine from abroad to the company's factory, the amount of €20,000 was paid on 15/4/2017. As the insurance coverage of the machine during transportation was the responsibility of the selling company, HUANG S.A. proceeded to insure the machine from 16/4/2017 to 15/4/2018, paying the amount of €1,200. The delivery took place on 15/4/2017. As adequate ventilation of the multifunction device is essential for its proper operation, the company fitted an air duct on the multifunction device. The cost of the air duct amounted to €2,000 and was paid on 20/4/2017. On 25/4/2017, an external electrician was paid €5,000 for the electrical connection of the device. The company also paid €5,000 to an…arrow_forwardI need answer typing clear urjent no chatgpt used pls i will give 5 Upvotes.only typing .arrow_forwardCash flow cyclearrow_forward
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