Pardo Company produces a single product and has capacity to produce 105,000 units per month. Costs to produce its current monthlysales of 84,000 units follow. The normal selling price of the product is $144 per unit. A new customer offers to purchase 21,000 unitsfor $63.90 per unit. If the special offer is accepted, there will be no additional fixed overhead and no additional fixed general andadministrative costs. The special offer would not affect its normal sales.Direct materialsDirect laborVariable overheadFixed overheadFixed general and administrativeTotals(a) Compute the income from the special offer.(b) Should the company accept the special offer?Required ARequired BVariable costsPer Unit$ 12.5015.0013.0017.5013.00$ 71.00Complete this question by entering your answers in the tabs below.Contribution marginFixed costsFixed overheadFixed general and administrativeIncomeCosts at 84,000UnitsCompute the income for the special offer. (Round your "Per Unit" answers to 2 decimal places.)SPECIAL OFFER ANALYSIS< Required A$ 1,050,0001,260,0001,092,0001,470,0001,092,000$ 5,964,000Per UnitTotalRequired B > Pardo Company produces a single product and has capacity to produce 105,000 units per month. Costs to produce its current monthlysales of 84,000 units follow. The normal selling price of the product is $144 per unit. A new customer offers to purchase 21,000 unitsfor $63.90 per unit. If the special offer is accepted, there will be no additional fixed overhead and no additional fixed general andadministrative costs. The special offer would not affect its normal sales.Direct materialsDirect laborVariable overheadFixed overheadFixed general and administrativeTotals(a) Compute the income from the special offer.(b) Should the company accept the special offer?Per Unit$12.5015.0013.0017.5013.00$71.00Required A Required BShould the company accept the special offer?Should the company accept the special offer?Complete this question by entering your answers in the tabs below.Costs at 84,000Units< Required A$ 1,050,0001,260,0001,092,0001,470,0001,092,000$ 5,964,000Required B >

If a special offer is made with a price per unit that is equal to the total variable cost per unit,…

Answered: Pardo Company produces a single product…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 4EB: Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all...

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Markson and Sons leases a copy machine with terms that include a fixed fee each month plus acharge for each copy made. Markson made 9,000 copies and paid a total of $480 in January. In April, they paid $320 for 5,000 copies. What is the variable cost per copy if Markson uses the high-low method to analyze costs?
Markson and Sons leases a copy machine with terms that include a fixed fee each month of $500 plus a charge for each copy made. The company uses the high-low method to analyze costs. If Markson paid $360 for 5,000 copies and $280 for 3,000 copies, how much would Markson pay if it made 7,500 copies?
Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90. The companys monthly fixed expenses are $180,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of October when they will sell 10,000 units. How many units will Cadre need to sell in order to realize a target profit of $300,000? What dollar sales will Cadre need to generate in order to realize a target profit of $300,000? Construct a contribution margin income statement for the month of August that reflects $2,400,000 in sales revenue for Cadre, Inc.
Variety Artisans has a bottleneck in their production that occurs within the engraving department. Arjun Naipul, the COO, is considering hiring an extra worker, whose salary will be $45,000 per year, to solve the problem. With this extra worker, the company could produce and sell 3,500 more units per year. Currently, the selling price per unit is $18 and the cost per unit is $5.85. Using the information provided, calculate the annual financial impact of hiring the extra worker.
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Gelbart Company manufactures gas grills. Fixed costs amount to 16,335,000 per year. Variable costs per gas grill are 225, and the average price per gas grill is 600. Required: 1. How many gas grills must Gelbart Company sell to break even? 2. If Gelbart Company sells 46,775 gas grills in a year, what is the operating income? 3. If Gelbart Companys variable costs increase to 240 per grill while the price and fixed costs remain unchanged, what is the new break-even point?
Zena Technology sells arc computer printers for $55 per unit. Unit product costs are: A special order to purchase 15,000 arc printers has recently been received from another company and Zena has idle capacity to fill the order. Zena will incur an additional $2 per printer for additional labor costs due to a slight modification the buyer wants made to the original product. One-third of the manufacturing overhead costs is fixed and will be incurred no matter how many units are produced. When negotiating the price, what is the minimum selling price that Zena should accept for this special order?
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Pardo Company produces a single product and has capacity to produce 125,000 units per month. Costs to produce its current monthly sales of 100,000 units follow. The normal selling price of the product is $136 per unit. A new customer offers to purchase 25,000 units for $63.00 per unit. If the special offer is accepted, there will be no additional fixed overhead and no additional fixed general and administrative costs. The special offer would not affect its normal sales. Direct materials Costs at 100,000 Units $ 1,250,000 Direct labor Variable overhead Fixed overhead Fixed general and administrative Totals Per Unit $ 12.50 15.00 1,500,000 10.00 17.50 15.00 1,000,000 1,750,000 1,500,000 $ 70.00 $ 7,000,000 (a) Compute the income from the special offer. (b) Should the company accept the special offer? Complete this question by entering your answers in the tabs below. Required A Required B Compute the income for the special offer. Note: Round your "Per Unit" answers to 2 decimal places.…
Pardo Company produces a single product and has capacity to produce 195,000 units per month. Costs to produce its current monthly sales of 156,000 units follow. The normal selling price of the product is $132 per unit. A new customer offers to purchase 39,000 units for $61.20 per unit. If the special offer is accepted, there will be no additional fixed overhead and no additional fixed general and administrative costs. The special offer would not affect its normal sales. Direct materials Direct labor Variable overhead Fixed overhead Fixed general and administrative Totals (a) Compute the income from the special offer. (b) Should the company accept the special offer? Required A Required B Complete this question by entering your answers in the tabs below. Variable costs Per Unit $ 12.50 15.00 10.00 17.50 13.00 $ 68.00 SPECIAL OFFER ANALYSIS Compute the income for the special offer. (Round your "Per Unit" answers to 2 decimal places.) Contribution margin Fixed costs Costs at 156,000 Units…

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