Question

Check my work 1 Goshford Company produces a single product and has capacity to produce 150,000 units per month. Costs to produce its current sales of 120,000 units follow. The regular selling price of the product is $132 per unit Management is approached by a new customer who wants to purchase 30,000 units of the product for $75.60 per unit. If the order is accepted, there will be no additional fixed manufacturing overhead and no additional fixed selling and administrative expenses. The customer is not in the company's regular selling territory, so there will be a $5.60 per unit shipping expense in addition to the regular variable selling and administrative expenses. Book Costs at Per Unit 120,eee Units $ 1,500,eee 1,800,000 1,320, eee 2,100,e00 1,800,e00 1,560,ee0 $10,880,eee Hint Direct materials Direct labor Variable nanufacturing overhead Fixed manufacturing overhead Variable se11ing and adninistrative expenses Fixed selling and administrative expenses $12.50 15.00 11.00 Print 17.50 erences 15.e0 13.0 Totals $84,00 Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $75.60 per unit Additional Volume Combined Total Normal Volume ex 1 of 1 Next

Answer 1

rate positively .. let me know if you need any clarification..

			per unit *120000	per unit *30000
	per unit		Normal volume	Additional volume	Combined volume
Sales	132		1584000	2268000	3852000
Cost and expense :
Direct material	12.5		150000	375000	525000
Direct labor	15		180000	450000	630000
Variable manufacturing overhead	11		132000	330000	462000
fixed manufacturing overhead	17.5		210000		210000
Variable selling and administrative expenses	15		180000	450000	630000
Fixed selling and administration expenses	13		156000		156000
shipping expenses	5.6			168000	168000
Total cost and expenses			1008000	1773000	2781000
Net income			576000	495000	1071000