Rutkey Collectibles is
a small toy company that manufactures and sells metal replicas of
classic cars. Each car sells for $3.55 The cost of each unit
follows:
Materials | $ | 1.10 | |
Labor | 0.70 | ||
Variable overhead | 0.50 | ||
Fixed overhead ($17,800 per month, 17,800 units per month) | 1.00 | ||
Total costs per unit | $ | 3.30 | |
One of Rutkey's regular customers asked the company to fill a
special order of 500 units at a selling price of $2.55 per unit.
Rutkey's can fill the order using existing capacity without
affecting total fixed costs for the month. However, Rutkey's
manager was concerned about selling at a price below the $3.30 cost
per unit and has asked for your advice.
Required:
a. Prepare a schedule to show the impact of providing the special order of 500 units on Rutkey's profits in addition to the regular production and sales of 17,800 units per month. (Select option "higher" or "lower", keeping Status Quo as the base. Select "None" if there is no effect.)
b. Based solely on the data given, what is the lowest price per unit at which the model cars could be sold for the special order without reducing Rutkey's profits? (Round your answer to 2 decimal places.)
a) Incremental analysis
Incremental revenue (500*2.55) | 1275 |
Incremental cost | |
Material | 550 |
Labor | 350 |
Variable overhead | 250 |
Total incremental cost | 1150 |
Net income (loss) | 125 |
b) Lowest price per unit = 1.1+.70+.50 = 2.30
Rutkey Collectibles is a small toy company that manufactures and sells metal replicas of classic cars....
Rutkey Collectibles is a small toy company that manufactures and sells metal replicas of classic cars. Each car sells for $2.65 The cost of each unit follows: $0.se Materials Labor Variable overhead Fixed overhead ($17,500 per month, 17,500 units per month) Total costs per unit 1.00 One of Rutkey's regular customers asked the company to fill a special order of 500 units at a selling price of $165 per unit. Rutkey's can fill the order using existing capacity without affecting...
Rutkey Collectibles is a small toy company that manufactures and sells metal replicas of classic cars. Each car sells for $3.50 The cost of each unit follows: Materials $ 0.80 Labor 0.70 Variable overhead 0.50 Fixed overhead ($20,200 per month, 20,200 units per month) 1.00 Total costs per unit $ 3.00 One of Rutkey's regular customers asked the company to fill a special order of 800 units at a selling price of $2.50 per unit. Rutkey's can fill the order...
Rutkey Collectibles is a small toy company that manufactures and sells metal replicas of classic cars. Each car sells for $2.95 The cost of each unit follows: Materials $ 0.90 Labor 0.50 Variable overhead 0.30 Fixed overhead ($21,100 per month, 21,100 units per month) 1.00 Total costs per unit $ 2.70 One of Rutkey's regular customers asked the company to fill a special order of 700 units at a selling price of $1.95 per unit. Rutkey's can fill the order...
Rutkey Collectibles is a small toy company that manufactures and sells metal replicas of classic cars. Each car sells for $3.40 The cost of each unit follows: Materials $ 1.00 Labor 0.40 Variable overhead 0.50 Fixed overhead ($18,200 per month, 18,200 units per month) 1.00 Total costs per unit $ 2.90 One of Rutkey's regular customers asked the company to fill a special order of 300 units at a selling price of $2.40 per unit. Rutkey's can fill the order...
Rutkey Collectibles is a small toy company that manufactures and sells metal replicas of classic cars. Each car sells for $2.95 The cost of each unit follows: Materials $ 0.90 Labor 0.50 Variable overhead 0.30 Fixed overhead ($21,100 per month, 21,100 units per month) 1.00 Total costs per unit $ 2.70 One of Rutkey's regular customers asked the company to fill a special order of 700 units at a selling price of $1.95 per unit. Rutkey's can fill the order...
Rutkey Collectibles is a small toy company that manufactures and sells metal replicas of classic cars. Each car sells for $3.40 The cost of each unit follows: Materials $ 0.90 Labor 0.70 Variable overhead 0.30 Fixed overhead ($22,200 per month, 22,200 units per month) 1.00 Total costs per unit $ 2.90 One of Rutkey's regular customers asked the company to fill a special order of 800 units at a selling price of $2.40 per unit. Rutkey's can fill the order...
Rutkey Collectibles is a small toy company that manufactures and sells metal replicas of classic cars. Each car sells for $2.75 The cost of each unit follows: Materials Labor Variable overhead Fixed overhead ($14,175 per month, 18,900 units per month) Total costs per unit $1.00 0.20 0.30 0.75 $2.25 One of Rutkey's regular customers asked the company to fill a special order of 900 units at a selling price of $2.00 per unit. Rutkey's can fill the order using existing...
Rutkey Collectibles is a small toy company that manufactures and sells metal replicas of classic cars. Each car sells for $40. The cost of each unit follows Materials Labor Variable overhead Fixed overhead ($160,000 per month, 20,000 units per month) Total costs per unit One of Rutkey's regular customers asked the company to fill a special order of 3,000 units at a selling price of $28 per unit. Rutkey's can fill the order using existing capacity without affecting total fixed...
Rutkey Collectibles is a small toy company that manufactures and sells metal replicas of classic cars. Each car sells for $3.55 The cost of each unit follows: Materials Labor Variable overhead Fixed overhead ($27,625 per month, 22,100 units per month) Total costs per unit $1.10 2.40 8.30 1.25 $3.05 ences One of Rutkey's regular customers asked the company to fill a special order of 600 units at a selling price of $2.30 per unit. Rutkey's can fill the order using...
Rutkey Collectibles is a small toy company that manufactures and sells metal replicas of classic cars. Each car sells for $3.35 The cost of each unit follows: Materials $ 1.20 Labor 0.40 Variable overhead 0.50 Fixed overhead ($14,700 per month, 19,600 units per month) 0.75 Total costs per unit $ 2.85 One of Rutkey's regular customers asked the company to fill a special order of 400 units at a selling price of $2.60 per unit. Rutkey's can fill the order...