Andreasen Corporation manufactures thermostats for office buildings. The following is the cost of each unit. Materials...

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Andreasen Corporation manufactures thermostats for office buildings. The following is the cost of each unit. Materials Labor

Required A Required B Required C Prepare a schedule to show the impact of filling the Simpson order on Andreasens profits fo

business accounting

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Answer 1

Answer #1

	(All costs in Thousands of Dollars)
	Status Quo 101000 units	Alternative 108600 units	Difference
Sales revenue	(101*$100)= $10100	(101$100+7.6$60)= $10556	(10556-10100)= 456	higher
Less: Variable costs
Materials	(101*$36)= 3636	(101$36+7.6$38)= 3924.8	(3924.8-3636)= 288.8	higher
Labor	(101*$14)= 1414	(108.6*$14)= 1520.4	(1520.4-1414)= 106.4	higher
Variable overhead	(101*$4)= 404	(108.6*$4)= 434.4	(434.4-404)= 30.4	higher
Total variable cost	$5454	5879.6	425.6	higher
Contribution margin	4646	4676.4	30.4	higher
Less: Fixed costs	1818	(1818+22)= 1840	(1840-1818)= 22	higher
Operating profit (loss)	$2828	$2836.4	$8.4	higher

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Answer 2

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