McAllister Company is operating at capacity and desires to add a new service to its rapidly...
McAllister Company is operating at capacity and desires to add a new service to its rapidly expanding business. The service should be added as long as service revenues exceed:
a. variable costs
b. fixed costs
c. the sum of variable and fixed costs
d. the sum of variable costs and any related opportunity costs.
Homework Answers
When the variable cost is recovered along with any related oppourtunities cost then only the business can add the service revenue. So, the answer is d.the sum of variable costs and any related opportunity costs.
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McAllister Company is operating at capacity and desires to add a
new service to its rapidly...
Opportunity costs is defined as the contribution to operating income that is forgone by not using...
Opportunity costs is defined as the contribution to operating income that is forgone by not using a limited resource in its next-best alternative use the cost of manufacturing a one-time-only special order when a firm has excess capacity to make more products the sum of variable and fixed costs in all business functions of the value chain, such as manufacturing costs or marketing costs the sum of variable and fixed costs in a particular business function of the value chain,...
12. If a company must expand capacity to accept a special order, it is likely that...
12. If a company must expand capacity to accept a special order, it is likely that there will be A) an increase in unit variable costs. B) no increase in fixed costs. C) an increase in variable and fixed costs per unit. D) an increase in fixed costs. 13. If a plant is operating at full capacity and receives a one-time opportunity to accept an order at a special price below its usual price, then A) only variable costs are...
2. A new business operated at 100% of capacity during its first month and incurred the...
2. A new business operated at 100% of capacity during its first month and incurred the following costs: Production costs (2,000 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead $180,000 240,000 280,000 100.000 $800,000 Operating expenses: Variable operating expenses $130,000 Fixed operating expenses 50,000 180,000 If 400 units are sold during the month, what is total cost of production reported under Absorption Costing? a. $160,000 b. S640,000 c. $140,000 d. $800,000 e. $700,000
To resolve a capacity bottleneck in its manufacturing operations, McGuire Machinery has decided to add new...
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If a plant is operating at full capacity and receives a one-time opportunity to accept an...
If a plant is operating at full capacity and receives a one-time opportunity to accept an order at a special price below its usual price, then a) only variable costs are relevant. B)fixed costs are not relevant. C)the order will likely be accepted. D) the order will likely be rejected.
Huang Automotive is presently operating at 75% of capacity. The company recently received an offer from...
Huang Automotive is presently operating at 75% of capacity. The
company recently received an offer from a Korean truck manufacturer
to purchase 21,000 units of a power steering system component for
$197 per unit. Peter Wu, vice-president of sales, notes that
although there will be an additional $2.75 shipping cost for each
component, he thinks that accepting the order will get the
company's "foot in the door" of an expanding international
market.
To determine variable and fixed costs, Huang's accountant...
Huang Automotive is presently operating at 75% of capacity. The company recently received an offer from...
Huang Automotive is presently operating at 75% of capacity. The
company recently received an offer from a Korean truck manufacturer
to purchase 26,500 units of a power steering system component for
$196 per unit. Peter Wu, vice-president of sales, notes that
although there will be an additional $2.00 shipping cost for each
component, he thinks that accepting the order will get the
company's "foot in the door" of an expanding international
market.
Huang Automotive is presently operating at 75% of...
Huang Automotive is presently operating at 75 % of capacity. The company recently received an offer...
Huang Automotive is presently operating at 75 % of capacity. The company recently received an offer from a Korean truck manufacturer to purchase 24,500 units of a power steering system component for $198 per unit. Peter Wu, vice-president of sales, notes that although there will be an additional $2.00 shipping cost for each component, he thinks that accepting the order will get the company's "foot in the door" of an expanding international market. To determine variable and fixed costs, Huang's...
The Goal OneGoal One Company manufactures windows. Its manufacturing plant has the capacity to produce 11,000...
The Goal OneGoal One Company manufactures windows. Its
manufacturing plant has the capacity to produce 11,000 windows each
month. Current production and sales are 10,000 windows per month.
The company normally charges $250 per window.
Cost information Variable costs that vary with number of units produced Direct materials 400,000 Direct manufacturing labour 350,000 Variable costs (for setups, materials handling, quality control, and so on) that vary with number of batches, 50 batches x $800 per batch 40,000 Fixed manufacturing costs...
Huang Automotive is presently operating at 75% of capacity. The company recently received an offer from...
Huang Automotive is presently operating at 75% of capacity. The
company recently received an offer from a Korean truck manufacturer
to purchase 23,500 units of a power steering system component for
$198 per unit. Peter Wu, vice-president of sales, notes that
although there will be an additional $3.00 shipping cost for each
component, he thinks that accepting the order will get the
company's "foot in the door" of an expanding international
market.
To determine variable and fixed costs, Huang's accountant...
Opportunity costs is defined as the contribution to operating income that is forgone by not using a limited resource in its next-best alternative use the cost of manufacturing a one-time-only special order when a firm has excess capacity to make more products the sum of variable and fixed costs in all business functions of the value chain, such as manufacturing costs or marketing costs the sum of variable and fixed costs in a particular business function of the value chain,...
12. If a company must expand capacity to accept a special order, it is likely that there will be A) an increase in unit variable costs. B) no increase in fixed costs. C) an increase in variable and fixed costs per unit. D) an increase in fixed costs. 13. If a plant is operating at full capacity and receives a one-time opportunity to accept an order at a special price below its usual price, then A) only variable costs are...
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Huang Automotive is presently operating at 75% of capacity. The
company recently received an offer from a Korean truck manufacturer
to purchase 21,000 units of a power steering system component for
$197 per unit. Peter Wu, vice-president of sales, notes that
although there will be an additional $2.75 shipping cost for each
component, he thinks that accepting the order will get the
company's "foot in the door" of an expanding international
market.
To determine variable and fixed costs, Huang's accountant...
Huang Automotive is presently operating at 75% of capacity. The
company recently received an offer from a Korean truck manufacturer
to purchase 26,500 units of a power steering system component for
$196 per unit. Peter Wu, vice-president of sales, notes that
although there will be an additional $2.00 shipping cost for each
component, he thinks that accepting the order will get the
company's "foot in the door" of an expanding international
market.
Huang Automotive is presently operating at 75% of...
Huang Automotive is presently operating at 75 % of capacity. The company recently received an offer from a Korean truck manufacturer to purchase 24,500 units of a power steering system component for $198 per unit. Peter Wu, vice-president of sales, notes that although there will be an additional $2.00 shipping cost for each component, he thinks that accepting the order will get the company's "foot in the door" of an expanding international market. To determine variable and fixed costs, Huang's...
The Goal OneGoal One Company manufactures windows. Its
manufacturing plant has the capacity to produce 11,000 windows each
month. Current production and sales are 10,000 windows per month.
The company normally charges $250 per window.
Cost information Variable costs that vary with number of units produced Direct materials 400,000 Direct manufacturing labour 350,000 Variable costs (for setups, materials handling, quality control, and so on) that vary with number of batches, 50 batches x $800 per batch 40,000 Fixed manufacturing costs...
Huang Automotive is presently operating at 75% of capacity. The
company recently received an offer from a Korean truck manufacturer
to purchase 23,500 units of a power steering system component for
$198 per unit. Peter Wu, vice-president of sales, notes that
although there will be an additional $3.00 shipping cost for each
component, he thinks that accepting the order will get the
company's "foot in the door" of an expanding international
market.
To determine variable and fixed costs, Huang's accountant...
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