Solution 1:
Special order price = $46*84% = $38.64 per unit
Computation of profit from special order - Polaski company | |
Particulars | Amount |
Sales (7000*$38.64) | $270,480.00 |
Variable Cost: | |
Direct material (7000*$15) | $105,000.00 |
Direct labor (7000*$8) | $56,000.00 |
Variable manufacturing overhead (7000*$3) | $21,000.00 |
Variable selling expenses (7000*$1) | $7,000.00 |
Contribution | $81,480.00 |
Additional fixed cost of machine | $14,000.00 |
Financial advantage (disadvantage) | $67,480.00 |
Solution 2:
Price for US Army order = Unit product cost + Fixed fee
= ($15 + $8 + $3+ $5) + $1.40 = $32.40 per unit
Computation of profit from US Army order - Polaski company | |
Particulars | Amount |
Sales (7000*$32.40) | $226,800.00 |
Variable Cost: | |
Direct material (7000*$15) | $105,000.00 |
Direct labor (7000*$8) | $56,000.00 |
Variable manufacturing overhead (7000*$3) | $21,000.00 |
Contribution | $44,800.00 |
Additional fixed cost | $0.00 |
Financial advantage (disadvantage) | $44,800.00 |
solution 3:
Regular contribution margin per unit = $46 - ($15 + $8 + $3 + $4) = $16 per unit
Computation of profit from US Army order - Polaski company | |
Particulars | Amount |
Sales (7000*$32.40) | $226,800.00 |
Variable Cost: | |
Direct material (7000*$15) | $105,000.00 |
Direct labor (7000*$8) | $56,000.00 |
Variable manufacturing overhead (7000*$3) | $21,000.00 |
Contribution | $44,800.00 |
Less: Loss of contribution from regular sale (7000*$16) | $112,000.00 |
Financial advantage (disadvantage) | -$67,200.00 |
Problem 11-22 Special Order Decisions (LO11-4) Polaski Company manufactures and sells a single product called a Ret...
Problem 11-22 Special Order Decisions [LO11-4] Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 36,000 Rets per year. Costs associated with this level of production and sales are given below: Unit Total Direct materials $ 15 $ 540,00 Direct labor 8 288, eee Variable manufacturing overhead 188,888 Fixed manufacturing overhead 9 324,000 Variable selling expense 72,eee Fixed selling expense 216.ee Total cost $ 43 $ 1,548,800 3 2...
Problem 11-22 Special Order Decisions [LO11-4] Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 38,000 Rets per year. Costs associated with this level of production and sales are given below: Unit Total Direct materials $ 15 $ 570,000 Direct labor 8 304,000 Variable manufacturing overhead 3 114,000 Fixed manufacturing overhead 5 190,000 Variable selling expense 4 152,000 Fixed selling expense 6 228,000 Total cost $ 41 $ 1,558,000...
Problem 11-22 Special Order Decisions [LO11-4] Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 32,000 Rets per year. Costs associated with this level of production and sales are given below: Unit Total Direct materials $ 20 $ 640,000 Direct labor 8 256,000 Variable manufacturing overhead 3 96,000 Fixed manufacturing overhead 7 224,000 Variable selling expense 2 64,000 Fixed selling expense 6 192,000 Total cost $ 46 $ 1,472,000...
Problem 11-22 Special Order Decisions [LO11-4] Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 42,000 Rets per year. Costs associated with this level of production and sales are given below: Unit Total Direct materials $ 25 $ 1,050,000 Direct labor 8 336,000 Variable manufacturing overhead 3 126,000 Fixed manufacturing overhead 7 294,000 Variable selling expense 4 168,000 Fixed selling expense 6 252,000 Total cost $ 53 $ 2,226,000...
Problem 11-22 Special Order Decisions [LO11-4] Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 48,000 Rets per year. Costs associated with this level of production and sales are given below: Unit Total Direct materials $ 20 $ 960,000 Direct labor 10 480,000 Variable manufacturing overhead 3 144,000 Fixed manufacturing overhead 7 336,000 Variable selling expense 4 192,000 Fixed selling expense 6 288,000 Total cost $ 50 $ 2,400,000...
Problem 11-22 Special Order Decisions [LO11-4] Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 40,000 Rets per year. Costs associated with this level of production and sales are given below: Unit Total Direct materials $ 15 $ 600,000 Direct labor 8 320,000 Variable manufacturing overhead 3 120,000 Fixed manufacturing overhead 5 200,000 Variable selling expense 4 160,000 Fixed selling expense 6 240,000 Total cost $ 41 $ 1,640,000...
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 36,000 Rets per year. Costs associated with this level of production and sales are given below: Unit Total Direct materials $ 20 $ 720,000 Direct labor 10 360,000 Variable manufacturing overhead 3 108,000 Fixed manufacturing overhead 9 324,000 Variable selling expense 2 72,000 Fixed selling expense 6 216,000 Total cost $ 50 $ 1,800,000 The Rets normally sell for $55...
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 32,000 Rets per year. Costs associated with this level of production and sales are given below: Unit $ 20 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expense Fixed selling expense Total cost Total $ 640,000 256,000 96,000 224,000 64,000 192,000 $ 1,472,000 $ 46 The Rets normally sell for $51 each. Fixed manufacturing overhead is...
Problem 12-22 Special Order Decisions [LO12-4] Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 38,000 Rets per year. Costs associated with this level of production and sales are given below: Unit Total Direct materials $ 20 $ 760,000 Direct labor 6 228,000 Variable manufacturing overhead 3 114,000 Fixed manufacturing overhead 9 342,000 Variable selling expense 4 152,000 Fixed selling expense 6 228,000 Total cost $ 48 $ 1,824,000...
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 36,000 Rets per year. Costs associated with this level of production and sales are given below: Unit $ 20 10 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expense Fixed selling expense Total cost Total $ 720,000 360,000 108,000 252,000 72,000 216,000 $ 1,728,000 $ 48 The Rets normally sell for $53 each. Fixed manufacturing overhead...