It costs Vaughn Manufacturing $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 2600 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted. Vaughn has sufficient unused capacity to produce the 2600 scales. If the special order is accepted, what will be the effect on net income?

Q: The company sells bikes for $700.  The company currently sells 8,500, but has the capacity to…

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: Homerun Corporation produces baseball bats for kids that it sells for $36 each. At capacity, the…

A: Operating income is a bookkeeping value that measures the profit determined from a business, by…

Q: Franklin Company, which produces and sells a small digital clock, bases its pricing strategy on a 35…

A: Contribution margin is computed by subtracting the variable cost of production from the sales price.

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A: Determination present Profitability Particulars Amount Sales Revenue (15,000 x 50) $750,000…

Q: It costs a company 14 of variable and 6 of fixed cost to produce a product Z200 that sells for 35. A…

A: Fixed cost is not considered whenever there is unused capacity.

Q: At ABC Company, it costs $30 per unit ($20 variable and $10 fixed) to make a product at full…

A: Sales on special order = No. of units  x sales price per unit = 3000 units  x $25 per unit = $75,000

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A: Relevant cost refers to those cost which is relevant for choosing the best alternative whereas…

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A: Incremental Income is the additional profit  when extra units of products are sold beyond the…

Q: Dennis Corp produces a dog food product called Special Export. It currently has 10,000 bags of…

A: Sell or further process decision was the decision made by the company to produce the product or to…

Q: Maize Company incurs a cost of $35 per unit, of which $20 is variable, to make a product that…

A: Relevant cost per unit = Variable cost per unit + Additional costs per unit to imprint a logo = $20…

Q: It costs Ghala Company OMR 13 of variable and OMR 6 of fixed costs to produce one unit which…

A: The answer is option (e.) [i.e OMR 3,000 Increase] Refer step 2 for explanation

Q: The company has been approached by an overseas distributor who wants to purchase 9,500 units on a…

A: Sales = Variable Cost + Fixed Cost + Profit

Q: Martin Company incurred the following costs for 50,000 units: Variable $180,000 costs Fixed costs…

A: Break-even point (BEP): Breakeven is the point where total expenses are equal to total revenue. at…

Q: Costa Company has a capacity of 40,000 units per year and is currently selling 35,000 for $400 each.…

A: Special order are acceptable to the extent if they bring incremental profits in the company. The…

Q: It costs HHI Company $7 of variable costs and $3 of fxed costs to produce its product at full…

A: Variable cost per unit for the offered 3,000 units = $7 + $2.50 = $9.50 . Even when company is not…

Q: The DeWayne Company sells binoculars for $150 per unit. The variable cost is $100 per unit while the…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: Mitchell Company manufactures a product with a unit variable cost of $50 and a unit sales price of…

A: As accepting the special order will not affect the fixed cost and the present sales (given), so the…

Q: how many units must Tony sell to breakeven?

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A: Net income is the income which is computed by diminution of operating cost from the gross profits.

Q: The Can Division of Crane Company manufactures and sells tin cans externally for $0.70 per can. Its…

A: Minimum Transfer price = Variable Cost + Opportunity cost - Cost saving if sold internally

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A: Relevant costing is defined as avoidable costs that are incurred while making a certain business…

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A: Net income is the income left to an entity after subtracting all the expenses from the revenue…

Q: Walton Corporation is currently selling 104 units of its product. The company is deciding the price…

A: Lets understand the basics. When any special order sales is made which does not affect the current…

Q: The Alpha Company produces microchips used in cellphones. Each microchip is priced at P45 and the…

A: The relevant cost is the cost incurred for the special order. The relevant cost in this case, will…

Q: XYZ Company incurs costs of $ 30 per unit ($18 variable and $12 fixed) to make a product that…

A: Net income is the amount earned by an entity after deducting all the outlays from the revenues.

Q: Bluebird Manufacturing hes received a special one-time order for 15,900 bird feedersfat $3.90 per…

A: The income statement represents the net income or net loss that is calculated by deducting the…

Q: (a) GEM has an opportunity to sell 10 000 units to an overseas customer. Import duties and other…

A: Cost may be defined as the amount of funds incurred for the production of goods from raw material…

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A: A firm needs to take special order decision when a product can be sold in a large quantity to a…

Q: FRANCORP sells product ABC for $60. The variable production cost is $12, the fixed production cost…

A: Minimum price per unit = Total cost / total units

Q: Sammy Co. currently sells 1,000 units of product M for P2 each. Variable costs are P1.50. A discount…

A: Contribution from Special order=Units×Contribution per unit=400×P 1.70 - P 1.50=400× P 0.20=P 80

Q: The pipes and plastic company manufactures wiring tools. The company  is currently producing well…

A:

Q: It costs Sohar Company OMR 12 of variable and OMR 5 of fixed costs to produce one unit of production…

A: The question is multiple choice question. Required  Choose the Correct Option

Q: incremental income or loss

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Q: Metalex Roofing Ltd manufactures roofing sheets whose normal selling price is GH¢20 per sheet. The…

A: A manager should make a decision whether to accept a product or not based on the comparison made…

Q: A domestic producer of baby carriages, Pramble, buys the wheels from a company in the north of…

A:

Q: It costs Concord Corporation $28 of variable costs and $16 of allocated fixed costs to produce an…

A: The firm has excess capacity, So fixed cost will not be affected and income can be calculated by…

Q: If the special order is accepted, what will be the effect on net income?

A: Computation of effect of net operating income if the special order is accepted is shown below :

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A: In case any special order for a particular customer is received for additional units, then there…

Q: NUBD Co. currently sells 1,000 units of product M for P2 each. Variable costs are P1.50. A discount…

A: Given information, sells 1,000 units of product M for P2 each Variable costs = P1.50 A discount…

Q: It costs Crane Company $12 of variable and $5 of fixed costs to produce one bathroom scale which…

A: Since the fixed cost would remain the same disregarding any change in the output till the optimal…

Q: Seville Company manufactures a product with a unit variable cost of $42 and a unit sales price of…

A: Relevant income of the special order is calculated by reducing relevant expenses from the relevant…

Q: Randall has received a special order for 4300 units of its product at a special price of $20. The…

A: Special orders are usually one-time and do not attract a fixed cost. So, if the firm has the…

Q: Bonita Company manufactures a product with a unit variable cost of $43 and a unit sales price of…

A: If the special order is covered under the present capacity of the business then it will not attract…

Q: It costs Sheridan Company $12 of variable and $5 of fixed costs to produce one bathroom scale which…

A: Net income = Sales revenue - Variable costs - Shipping costs Fixed cost is irrelevant to the…

Q: Bramble Company manufactures a product with a unit variable cost of $41 and a unit sales price of…

A: Note: In the special order question, firstly the relevant cost for the special order is calculated.…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.