MC Qu. 12-07 ADL company produces a single component with... ADL company produces a single component...
MC Qu. 12-07 ADL company produces a single component with...
ADL company produces a single component with variable and fixed production costs of $7 and $3. The product currently sells for $12 per unit. The company is currently operating at 50% of its 10,000 unit annual production capacity. A customer recently approached the company with a one-time special order for 7,000 units, offering the company only $10 per unit. Because of the specific nature of this order, the company would have to invest in a special machine (which would cost an additional $10,000) to satisfy this order. Variable production costs would remain unchanged. If the special order was accepted, the machine would be sold immediately after the order was delivered for $2,000. Should the company accept the special order?
Multiple Choice
-
Yes, as the company would earn an additional $3,000.
-
Yes, as the company would earn an additional $4,000.
-
No, as the company would lose $15,000.
-
No, as the company would lose $7,000.
Homework Answers
CM EARNED :- ( 10 - 7 ) * 7000 = $ 21000 EARNED
LESS:- MACHINE EXP. ( 10000 - 2000 ) $ 8000
LESS:- CM LOST OF 2000 REGULAR UNITS SOLD :- 2000 * ( 12 - 7 ) $ 10000
ADDITIONAL NET INCOME $ 3000
OPTION A IS CORRECT.
The company is currently operating at 50% of its 10,000 unit annual production capacity WHICH MEANS COMPANY HAS SPARE CAPACITY OF ONLY 5000 UNITS BUT IT RECEIEVED AN ORDER FOR 7000 UNITS, THEREFORE, IT HAS TO FOREGO ITS REGULAR SALE OF 2000 UNITS.
Add Answer to:
MC Qu. 12-07 ADL company produces a single component with...
ADL company produces a single component...
[The following information applies to the questions displayed below.] Corrientes Company produces a single product in...
[The following information applies to the questions displayed below.] Corrientes Company produces a single product in its Buenos Aires plant that currently sells for 6.70 p per unit. Fixed costs are expected to amount to 56,000 p for the year, and all variable manufacturing and administrative costs are expected to be incurred at a rate of 2.30 p per unit. Corrientes has two salespeople who are paid strictly on a commission basis. Their commission is 9 percent of the sales...
Grand Limited currently produces a component of a product with the following per unit production costs:...
Grand Limited currently produces a component of a product with the following per unit production costs: Direct materials $19 Direct labour 33 Overhead 18 Total production costs $70 Grand Ltd. currently manufactures these components in-house, averaging production of 29227 units each year. A supplier has approached the company offering to supply 29227 units each year at a cost of $50 each. 60% of the overhead is fixed and if Grand Ltd. purchases the components, then 1/3 of the fixed overhead...
MC Qu. 151 Kent Manufacturing produces a product... Kent Manufacturing produces a product that sells for $70.00 and...
MC Qu. 151 Kent Manufacturing produces a product... Kent Manufacturing produces a product that sells for $70.00 and has variable costs of $36.00 per unit Fixed costs are $408,000. Kent can buy a new production machine that will increase fixed costs by $28.800 per year but will decrease variable costs by $5.00 per unit Compute the contribution margin per unit if the machine is purchased . O O O O Prey 1 of 20 Next >
Waterways Continuing Problem 07 (Part 1) Waterways mass-produces a special connector unit that it normally sells...
Waterways Continuing Problem 07 (Part 1) Waterways mass-produces a special connector unit that it normally sells for $4.10. It sells approximately 32,900 of these units each year. The variable costs for each unit are $2.40. A company in Canada that has been unable to produce enough of a similar connector to meet customer demand would like to buy 13,600 of these units at $2.70 per unit. The production of these units is near full capacity at Waterways, so to accept...
ABC Company produces a single unit that it sells for $20 per unit. ABC has the...
ABC Company produces a single unit that it sells for $20 per unit. ABC has the capacity to produce 28,000 units each month. ABC is currently selling 19,000 units each month. The costs associated with each unit appears below: direct materials $5.00 direct labor 2.50 variable overhead 1.50 fixed overhead 1.00 variable selling costs 4.00 fixed selling costs 0.75 ABC Company has received a special order from a customer who wants to purchase 15,000 units at a reduced price of...
ABC Company produces a single unit that it sells for $20 per unit. ABC has the...
ABC Company produces a single unit that it sells for $20 per unit. ABC has the capacity to produce 28,000 units each month. ABC is currently selling 19,000 units each month. The costs associated with each unit appears below: direct materials direct labor variable overhead fixed overhead variable selling costs fixed selling costs $5.00 2.50 1.50 1.00 4.00 0.75 ABC Company has received a special order from a customer who wants to purchase 15,000 units at a reduced price of...
I'm not sure with my answer. ABC Company produces a single unit that it sells for...
I'm not sure with my answer.
ABC Company produces a single unit that it sells for $20 per unit. ABC has the capacity to produce 28,000 units each month. ABC is currently selling 19,000 units each month. The costs associated with each unit appears below: direct materials $5.00 direct labor 2.50 variable overhead 1.50 fixed overhead 1.00 variable selling costs 4.00 fixed selling costs 0.75 ABC Company has received a special order from a customer who wants to purchase 15,000...
Jett Company produces a single product and has the capacity to produce 70,000 units of this...
Jett Company produces a single product and has the capacity to produce 70,000 units of this product each month. The per unit costs of this product when 70,000 units are produced are shown below: direct materials $29.60 direct labor 5.80 variable overhead 2.50 fixed overhead 17.20 variable selling costs 1.80 fixed selling costs 6.70 The normal selling price of the product is $65.30 per unit. Jett is currently selling 68,300 units of this product to regular customers. Jett Company has...
MC Qu. 163 Flannigan Company manufactures and sells... Flannigan Company manufactures and sells a single product...
MC Qu. 163 Flannigan Company manufactures and sells... Flannigan Company manufactures and sells a single product that sells for $450 per unit: variable costs are $252. Annual fixed costs are $897,600. Current sale volume is $4,240,000. Flannigan Company management targets an annual pre-tax income of $1,165,000. Compute the unit sales to earn the target pre-tax net income. Multiple Choice 0 0 0 MC Qu. 114 Maroon Company's contribution... Maroon Company's contribution margin ratio is 32%. Total fixed costs are $124,800....
Only if you know plz Jett Company produces a single product and has the capacity to...
Only if you know plz
Jett Company produces a single product and has the capacity to produce 70,000 units of this product each month. The per unit costs of this product when 70,000 units are produced are shown below: direct materials direct labor variable overhead fixed overhead variable selling costs1.80 fixed selling costs $29.60 5.80 2.50 17.20 6.70 The normal selling price of the product is $65.30 per unit. Jett is currently selling 68,300 units of this product to regular...
[The following information applies to the questions displayed below.] Corrientes Company produces a single product in its Buenos Aires plant that currently sells for 6.70 p per unit. Fixed costs are expected to amount to 56,000 p for the year, and all variable manufacturing and administrative costs are expected to be incurred at a rate of 2.30 p per unit. Corrientes has two salespeople who are paid strictly on a commission basis. Their commission is 9 percent of the sales...
MC Qu. 151 Kent Manufacturing produces a product... Kent Manufacturing produces a product that sells for $70.00 and has variable costs of $36.00 per unit Fixed costs are $408,000. Kent can buy a new production machine that will increase fixed costs by $28.800 per year but will decrease variable costs by $5.00 per unit Compute the contribution margin per unit if the machine is purchased . O O O O Prey 1 of 20 Next >
Waterways Continuing Problem 07 (Part 1) Waterways mass-produces a special connector unit that it normally sells for $4.10. It sells approximately 32,900 of these units each year. The variable costs for each unit are $2.40. A company in Canada that has been unable to produce enough of a similar connector to meet customer demand would like to buy 13,600 of these units at $2.70 per unit. The production of these units is near full capacity at Waterways, so to accept...
ABC Company produces a single unit that it sells for $20 per unit. ABC has the capacity to produce 28,000 units each month. ABC is currently selling 19,000 units each month. The costs associated with each unit appears below: direct materials direct labor variable overhead fixed overhead variable selling costs fixed selling costs $5.00 2.50 1.50 1.00 4.00 0.75 ABC Company has received a special order from a customer who wants to purchase 15,000 units at a reduced price of...
I'm not sure with my answer.
ABC Company produces a single unit that it sells for $20 per unit. ABC has the capacity to produce 28,000 units each month. ABC is currently selling 19,000 units each month. The costs associated with each unit appears below: direct materials $5.00 direct labor 2.50 variable overhead 1.50 fixed overhead 1.00 variable selling costs 4.00 fixed selling costs 0.75 ABC Company has received a special order from a customer who wants to purchase 15,000...
MC Qu. 163 Flannigan Company manufactures and sells... Flannigan Company manufactures and sells a single product that sells for $450 per unit: variable costs are $252. Annual fixed costs are $897,600. Current sale volume is $4,240,000. Flannigan Company management targets an annual pre-tax income of $1,165,000. Compute the unit sales to earn the target pre-tax net income. Multiple Choice 0 0 0 MC Qu. 114 Maroon Company's contribution... Maroon Company's contribution margin ratio is 32%. Total fixed costs are $124,800....
Only if you know plz
Jett Company produces a single product and has the capacity to produce 70,000 units of this product each month. The per unit costs of this product when 70,000 units are produced are shown below: direct materials direct labor variable overhead fixed overhead variable selling costs1.80 fixed selling costs $29.60 5.80 2.50 17.20 6.70 The normal selling price of the product is $65.30 per unit. Jett is currently selling 68,300 units of this product to regular...
Most questions answered within 3 hours.
-
Company AAA produces only one product which other manufacturers
purchase as a component for their final...
asked 1 minute from now -
An
item can be appended to an array-based list, provided the lenght is
less than the...
asked 1 minute from now -
Two particles each have a rest mass energy of 30 MeV and are
traveling with a...
asked 2 hours ago -
why
is vectorization a faster alternative to loops?
asked 3 hours ago -
General Matter’s outstanding bond issue has a coupon rate of
11.8%, and it sells at a...
asked 3 hours ago -
Write a one page essay on how important is it to know your basic
accounting knowledge...
asked 3 hours ago -
You are a Senior Civil Engineer posted at the Contracts and
Procurement Division of the Ministry...
asked 3 hours ago -
When using the percentage of completion method, the
company
- recognizes revenues and gross profit each...
asked 3 hours ago -
Is a level production strategy suitable for a pure service
industry, such as professional accounting and...
asked 3 hours ago -
Baker Industries’ net income is $23000, its interest expense is
$4000, and its tax rate is...
asked 3 hours ago -
a) A proton moves at 500 m/s in a 2 T magnetic field. What is
the...
asked 3 hours ago -
Anderson Systems is considering a project that has the following
cash flow and WACC data. What...
asked 4 hours ago