Variable Direct material cost = $15,729,500 / 193,000 = $81.50
Variable Direct labour cost = $4,053,000 / 193,000 = $21
Variable Overhead cost = ($25,999,500 - $23,939,500) / (233,000 - 193,000) = $51.50
Variable Selling and administrative cost = ($11,013,500 - $10,633,500) / (233,000 - 193,000) = $9.50
$2.25 shipping cost for each component is also incurred for special order.
Total variable cost = $81.50 + $21 + $51.50 + $9.50 + $2.25 = $165.75
Total fixed cost for special order = $290,000 + $210,000 = $500,000
Profit = 20,000 units X [$198 - $165.75] - $500,000 = $145,000
Profit = $145,000
This is a special order problem that also requires that you use the high low method to estimate some cost function para...
high low method This is a special order problem that also requires that you use the high low method to estimate some cost function parameters, so you may want to review the high-low method lectures in Module 1. As with almost all of the analyses that we have done, determining variable and fixed costs, and knowing what to do with them, is critical. Huang Automotive is presently operating at 75% of capacity. The company recently received an offer from a...
This is a special order problem that also requires that you use the high low method to estimate some cost function parameters, so you may want to review the high-low method lectures in Module 1. As with almost all of the analyses that we have done, determining variable and fixed costs, and knowing what to do with them, is critical. ______________________________________________________ Huang Automotive is presently operating at 75% of capacity. The company recently received an offer from a Korean truck...
This is a special order problem that also requires that you use the high low method to estimate some cost function parameters, so you may want to review the high-low method lectures in Module 1. As with almost all of the analyses that we have done, determining variable and fixed costs, and knowing what to do with them, is critical Huang Automotive is presently operating at 75% of capacity. The company recently received an offer from a Korean truck manufacturer...
This is a special order problem that also requires that you use the high low method to estimate some cost function parameters, so you may want to review the high-low method lectures in Module 1. As with almost all of the analyses that we have done, determining variable and fixed costs, and knowing what to do with them, is critical. Huang Automotive is presently operating at 75% of capacity. The company recently received an offer from a Korean truck manufacturer...
This is a special order problem that also requires that you use the high low method to estimate some cost function parameters, so you may want to review the high-low method lectures in Module 1. As with almost all of the analyses that we have done, determining variable and fixed costs, and knowing what to do with them, is critical. Huang Automotive is presently operating at 75% of capacity. The company recently received an offer from a Korean truck manufacturer...
Using the high-low method 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. To determine variable and...
Huang Automotive is presently operating at 75% of capacity. The company recently received an offer from a Korean truck manufacturer to purchase 26,000 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 accountant used...
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...
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...
Huang Automotive is presently operating at 75% of capacity. The company recently received an offer from a Korean truck manufacturer to purchase 23,000 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...