Explanation Special order occurs when the customer ask for one time order in the reduced price. These special orders are for large quantities. Relevant cost Analysis for special order decisions Per Unit Amount Sales $1.55 $ 31,000.00(1) Less: Variable cost $1.30 $ 26,000.00(2) Contribution $0.25 $ 5,000.00(3) Less: Fixed cost (Machinery cost) - $8,000 Loss - $ 3,000.00(4) Table (1) Working note: Calculation of Sales Sales = Number of units× C ost per hour = 20,000 × $1 .30 = $31,000 (1) Calculation of variable cost Variable cost = Number of units × Cost per unit = 20,000 × $1 .30 = $26,000 (2) Calculation of contribution Contribution = Sales - Variable cost = $31,000 - $26,000 = $5,000 (3) Calculation of loss Los

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ISBN: 9780134128528

Author: Karen W. Braun, Wendy M. Tietz

Publisher: PEARSON

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Chapter 8, Problem 8.5SE

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To conclude: Whether the company SM should accept the special order decision or not.

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Managerial Accounting (5th Edition)

Ch. 8 - Prob. 1QC Ch. 8 - (Learning Objective 1) Keys to making short-term...Ch. 8 - (Learning Objective 2) Which is true of...Ch. 8 - (Learning Objective 3) Which of the following...Ch. 8 - Prob. 5QC Ch. 8 - Prob. 6QC Ch. 8 - (Learning Objective 4) A segment margin is the a....Ch. 8 - (Learning Objective 5) When resources are...Ch. 8 - (Learning Objective 6) Which of the following is...Ch. 8 - Prob. 10QC

Ch. 8 - Determine relevance of information (Learning...Ch. 8 - Prob. 8.2SE Ch. 8 - Prob. 8.3SE Ch. 8 - Prob. 8.4SE Ch. 8 - Prob. 8.5SE Ch. 8 - Prob. 8.6SE Ch. 8 - Prob. 8.7SE Ch. 8 - Prob. 8.8SE Ch. 8 - Product mix decision: Unlimited demand (Learning...Ch. 8 - Prob. 8.10SE Ch. 8 - Outsourcing production decision (Learning...Ch. 8 - Relevant information for outsourcing delivery...Ch. 8 - Prob. 8.13SE Ch. 8 - Prob. 8.14SE Ch. 8 - Prob. 8.15SE Ch. 8 - Determine relevant and irrelevant information...Ch. 8 - SUSTAINABILITY ES-17A Sustainability and...Ch. 8 - Prob. 8.18AE Ch. 8 - Prob. 8.19AE Ch. 8 - Analyze special order decision (Learning Objective...Ch. 8 - Prob. 8.21AE Ch. 8 - Prob. 8.22AE Ch. 8 - Prob. 8.23AE Ch. 8 - Discontinuing a product line (Learning Objective...Ch. 8 - Prob. 8.25AE Ch. 8 - Determine product mix for retailertwo stocking...Ch. 8 - Prob. 8.27AE Ch. 8 - Make-or-buy product component (Learning Objective...Ch. 8 - Prob. 8.29AE Ch. 8 - Prob. 8.30AE Ch. 8 - Prob. 8.31AE Ch. 8 - Prob. 8.32BE Ch. 8 - Prob. 8.33BE Ch. 8 - Prob. 8.34BE Ch. 8 - Prob. 8.35BE Ch. 8 - Prob. 8.36BE Ch. 8 - Prob. 8.37BE Ch. 8 - Prob. 8.38BE Ch. 8 - Prob. 8.39BE Ch. 8 - Prob. 8.40BE Ch. 8 - Identify constraint, then determine product mix...Ch. 8 - Determine product mix for retailertwo stocking...Ch. 8 - Prob. 8.43BE Ch. 8 - Prob. 8.44BE Ch. 8 - Prob. 8.45BE Ch. 8 - Determine maximum outsourcing price (Learning...Ch. 8 - Prob. 8.47BE Ch. 8 - Prob. 8.48AP Ch. 8 - Special order decision and considerations...Ch. 8 - Prepare and use contribution margin statements for...Ch. 8 - Product mix decision under constraint (Learning...Ch. 8 - Outsourcing decision given alternative use of...Ch. 8 - Prob. 8.53AP Ch. 8 - Prob. 8.54BP Ch. 8 - Prob. 8.55BP Ch. 8 - Prepare and use contribution margin statements for...Ch. 8 - Prob. 8.57BP Ch. 8 - Prob. 8.58BP Ch. 8 - Prob. 8.59BP Ch. 8 - Decide whether to discontinue a department...Ch. 8 - Prob. 8.61ACT Ch. 8 - Outsourcing Decision at a Real Company Go to the...Ch. 8 - Prob. 8.63ACT Ch. 8 - Prob. 8.64ACT

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To conclude: Whether the company SM should accept the special order decision or not.

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To conclude: Whether the company SM should accept the special order decision or not.

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Chapter 8 Solutions