a | |||
Reject Order | Accept Order | Differential Effect on Income | |
(Alternative 1) | (Alternative 2) | (Alternative 2) | |
Revenues | 0 | 436800 | 436800 |
Costs: | |||
Variable manufacturing costs | 0 | -420000 | -420000 |
Income (loss) | 0 | 16800 | 16800 |
b | |||
Having unused capacity available is relevant to this decision. The differential revenue is more than the differential cost. Thus, accepting this additional business will result in a net gain | |||
c | |||
Minimum price per unit | 25.01 | ||
Workings: | |||
Revenues | =16800*26 | ||
Variable manufacturing costs | =16800*25 |
Down Home Jeans Co. has an annual plant capacity of 63,300 units, and current production is...
Decision on Accepting Additional Business Down Home Jeans Co. has an annual plant capacity of 63,700 units, and current production is 43,600 units. Monthly fixed costs are $38,600, and variable costs are $25 per unit. The present selling price is $38 per unit. On November 12 of the current year, the company received an offer from Fields Company for 16,400 units of the product at $28 each. Fields Company will market the units in a foreign country under its own...
Decision on Accepting Additional Business Down Home Jeans Co. has an annual plant capacity of 66,500 units, and current production is 44.700 units. Monthly fixed costs are $40,900, and variable costs as year, the company received an offer from Fields Company for 14,900 units of the product at $26 each. Fields Company will market the units in a to res: monthly fixed costs are $40,900, and variable costs are $25 per unit. The present selling price is $34 per unit....
decision on Accepting Additional Business Down Home Jeans Co. has an annual plant capacity of 66,400 units, and current production is 43,100 units. Monthly fixed costs are $39,400, and variable costs are $25 per unit. The present selling price is $34 per unit. On November 12 of the current year, the company received an offer from Fields Company for 14,700 units of the product at $27 each. Fields Company will market the units in a foreign country under its own...
Decision on Accepting Additional Business Down Home Jeans Co. has an annual plant capacity of 64,200 units, and current production is 43,300 units. Monthly fixed costs are $40,900, and variable costs are $25 per unit. The present selling price is $34 per unit. On November 12 of the current year, the company received an offer from Fields Company for 16,100 units of the product at $26 each. Fields Company will market the units in a foreign country under its own...
Homestead Jeans Co. has an annual plant capacity of 65,900 units, and current production is 45,000 units. Monthly fixed costs are $38,100, and variable costs are $25 per unit. The present selling price is $35 per unit. On November 12 of the current year, the company received an offer from Dawkins Company for 16,900 units of the product at $29 each. Dawkins Company will market the units in a foreign country under its own brand name. The additional business is...
Decision on Accepting Additional Business Homestead Jeans Co. has an annual plant capacity of 64,900 units, and current production is 45,500 units. Monthly fixed costs are $40,400, and variable costs are $25 per unit. The present selling price is $34 per unit. On November 12 of the current year, the company received an offer from Dawkins Company for 15,600 units of the product at $27 each. Dawkins Company will market the units in a foreign country under its own brand...
1. Decision on Accepting Additional Business Down Home Jeans Co. has an annual plant capacity of 66,200 units, and current production is 44,200 units. Monthly fixed costs are $41,100, and variable costs are $25 per unit. The present selling price is $34 per unit. On November 12 of the current year, the company received an offer from Fields Company for 15,600 units of the product at $28 each. Fields Company will market the units in a foreign country under its...
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Decision on Accepting Additional Business Homestead Jeans Co. has an annual plant capacity of 63,700 units, and current production is 43,300 units. Monthly fixed costs are $38,900, and variable costs are $25 per unit. The present selling price is $34 per unit. On November 12 of the current year, the company received an offer from Dawkins Company for 15,500 units of the product at $26 each. Dawkins Company will market the units in a foreign country under its own brand...
Decision on Accepting Additional Business Homestead Jeans Co. has an annual plant capacity of 63,600 units, and current production is 43,900 units. Monthly fixed costs are $40,100, and variable costs are $25 per unit. The present selling price is $32 per unit. On November 12 of the current year, the company received an offer from Dawkins Company for 15,200 units of the product at $26 each. Dawkins Company will market the units in a foreign country under its own brand...