Part A
Incremental unit cost of creating a Normal crate = direct labor + direct materials + variable overhead = $5.50 + $10.50 + $3.90 = $19.90
Incremental unit cost of creating a Special order crate = direct labor + direct materials + variable overhead+ an additional cost for the special labels – distribution costs = $5.50 + $10.50 + $3.90+$1.00-$0.50 = $20.40
Part B 1
Impact on profit |
increases |
$8000 |
Monthly operating profit with normal crate = ((28-19.90)*30000)-112000 = 131000
Monthly operating profit with Special order crate = 131000+((22-20.40)*5000) = 139000
Increase in profit = 139000-131000 = $8000
Part B 2
opportunity cost of not accepting the special order |
$8000 |
Part C 1
Impact on profit |
Decreases |
$32500 |
Profit without the special order = ((28-19.90)*35000)-112000 = $171500
Profit with the special order = (((28-19.90)*30000)-112000+((22-20.40)*5000) = 139000
Decrease in profit = 171500-139000 = $32500
Part C 2
opportunity cost of accepting the special order |
$32500 |
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main...
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main factory has the capacity to manufacture and sell 35,000 crates per month. The following Information is available for the factory. $ 27.80 Sales price per crate Variable cost per crate: Direct materials Direct labor Variable overhead Fixed costs per month 5.50 10.50 3.90 $113,000.00 Boys and Girls of Canada is a not-for-profit organization that raises funds each year by selling popcorn door-to-door. It offers...
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main factory has the capacity to manufacture and sell 35,000 crates per month. The following information is available for the factory. 25.09 Sales price per crate Variable cost per crate: Direct materials Direct labor Variable overhead Fixed costs per month 5.50 10.50 4.00 $101,000.00 Boys and Girls of Canada is a not-for-profit organization that raises funds each year by selling popcorn door-to-door. It offers to...
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main factory has the capacity to manufacture and sell 35,000 crates per month. The following information is available for the factory. Sales price per crate $ 26.00 Variable cost per crate: Direct materials 5.50 Direct labor 10.50 Variable overhead 3.90 Fixed costs per month $ 114,000.00 Boys and Girls of Canada is a not-for-profit organization that raises funds each year by selling popcorn door-to-door. It...
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main factory has the capacity to manufacture and sell 35,000 crates per month. The following information is available for the factory. Sales price per crate $ 26.00 Variable cost per crate: Direct materials 5.50 Direct labor 10.50 Variable overhead 3.50 Fixed costs per month $ 122,000.00 Boys and Girls of Canada is a not-for-profit organization that raises funds each year by selling popcorn door-to-door. It...
Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main factory has the capacity to manufacture and sell 35,000 crates per month. The following information is available for the factory. Sales price per crate $ 24.00 Variable cost per crate: Direct materials 5.50 Direct labor 10.50 Variable overhead 3.90 Fixed costs per month $ 107,000.00 Boys and Girls of Canada is a not-for-profit organization that raises funds each year by selling popcorn door-to-door. It...
The only thing I need to know is C-1 and C-2. Thank you! Poppycrock, Inc., manufactures large crates of microwaveable popcorn that are typically sold to distributors. Its main factory has the capacity to manufacture and sell 35,000 crates per month. The following information is available for the factory. Sales price per crate Variable cost per crate: Direct materials $ 24.00 5.50 Direct labor 10.50 Variable overhead 3.60 $120,000.00 Fixed costs per month Boys and Girls of Canada is a...
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1021-1, LO21-2, LO21-3, Heavenly Treat manufactures cases of hot chocolate that are typically sold to restaurants. Its main factory has the capacity to produce and sell 12,000 cases per month. The following information is available for the factory. 021-4 EXERCISE 21.5 Soal Order Decisions and Ipportunity Costs $40 Sales price per case Variable cost per crate: Direct materials Direct labor Variable overhead & sales commissions Fixed costs per month 12 3 10 $60,000 Wildwood Camps is a youth organization that...
Required information "Morning Sky, Inc. (MSI), manufactures and sells computer games. The company has several product lines based on the age range of the target market. MSI sells both individual games as well as packaged sets. All games are in CD format, and some utilize accessories such as steering wheels, electronic tablets, and hand controls. To date, MSI has developed and manufactured all the CDs itself as well as the accessories and packaging for all of its products. The...
Morning Sky, Inc. (MSI), manufactures and sells computer games. The company has several product lines based on the age range of the target market. MSI sells both individual games as well as packaged sets. All games are in CD format, and some utilize accessories such as steering wheels, electronic tablets, and hand controls. To date, MSI has developed and manufactured all the CDs itself as well as the accessories and packaging for all of its products. The gaming market has...