Referring to question 13, if the company had an opportunity to sell 15,000 additional units at $12 per unit, and theadditional sales would not affect its current expected sales, should the company take this special order? (Show work forcredit) A. Yes can make $30,000 B. Yes can make $90,000 C. No will lose $30,000 D. No will lose $90,000 The lowestcontribution margin per scarce resource is the most profitable. A. True B. False A cost that will not be affected by laterdecisions is termed an opportunity cost. A. True B. False Eliminating a product or segment may have the long-termeffect of reducing fixed costs. A. True B. False Differential revenue is the amount of income that would result from thebest available alternative proposed use of cash. A. True B. False In deciding whether to accept business at a specialprice, the short-run price should be set high enough to cover all variable costs and expenses. A. True B. False

The objective of this question is to determine whether the company should accept a special order to…

Answered: Referring to question 13, if the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Sprite company must decide on a make or buy decision. A supplier has offered to make the product at the same quality. Fixed marketing costs would be unaffected but variable marketing costs would be reduced by 30%. What is the maximum amount per unit that Sprite can pay the supplier without decreasing its operating income? P6.75 P9.75 P5.75 P5.05
The manufacturer of a product that a variable cost of $2.50 per unit and total fixed cost of $125,000 wants to determine the level of output necessary to avoid losses. a. what level of sales is necessary to break, even if the product is sold for $4.25? what will be the manufacturer's profit or loss on the sales of 1000,00 units? b.If fixed costs rise to $175,000, what is the new level of sales necessary to break even? c.If variable cost decline to $2.25 per unit, what is the new level of sales necessary to break even? d. If fixed cost were to increase to $17,000, while variable cost declined to $2.25 per unit, what is the new break-even level of sales? e. If a major proportion of fixed costs were noncahs (depreciation), would failure to achieve the break-even level of sales imply that the firm cannot pay its current obligation as they come due? Suppose $100,000 of the above fixed cost $125,000 werre depreciation expense. what level of sales would be the cash break-even level of sales?…
7. If the company have been selling its rubber glove at an avverage price of RM 0.40 per pair, what could be the lowest price that company could accept for a special order of say 500,000,000 gloves if the company could create the cpacity conveniently without increasing its operating costs ?
Brad Co. has introduced a new product in 2021. The following information relates to this new product: Selling Price Variable Manufacturing Costs Variable Selling Costs Fixed Manufacturing Costs Fixed Selling Costs $175 $50 $20 $114,800 $71,694 $136,667 $242,500 $82,000 $63,500 The owner has asked you to calculate what the breakeven value of sales would be in dollars?
Use this information for Stryker Industries to answer the question that follow. Stryker Industries received an offer from an exporter for 30,000 units of product at $19 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price $23 Unit manufacturing costs: Variable 10 Fixed 5 What is the amount of income or loss from the acceptance of the offer? Oa. $300,000 loss Ob. $690,000 loss Oc. $570,000 income Od. $270,000 income Previous Next 7:36 PM CP 12/13/2020
If the offer is accepted with unused capacity, fixed costs will not increase. The amount of the sales price above variable costs will contribute to covering fixed costs. The firm will have $22400 [4000 units X ($23.6 - $18)] more than if it does not accept the offer. Thus, net income will increase by $22400. It costs Sunland Company $18 of variable costs and $8 of fixed costs to produce its product that sells for $36. Wildhorse Company, a foreign buyer, offers to purchase 4000 units at $23.6 each. If the special offer is accepted and produced with unused capacity, net income will: increase $16000. increase $22400. decrease $11200. increase $11200.
You are considering opening a copy service in thestudent union. You estimate your fixed cost at $15,000 and thevariable cost of each copy sold at $.01. You expect the sellingprice to average $.05.a) What is the break-even point in dollars?b) What is the break-even point in units? PX• • S7.23 An electronics firm is currently manufacturing anitem that has a variable cost of $.50 per unit and a selling priceof $1.00 per unit. Fixed costs are $14,000.
Using your answer to Requirement 1, assume that Reshier Company is considering dropping any model with a negative product margin. What are the alternatives? Which alternative is more cost effective and by how much? (Assume that any traceable fixed costs can be avoided.) Do NOT round interim calculations and, if required, round your answer to the nearest dollar. will add $fill in the blank 8723bbfe4004028_3 to operating income 3. What if Reshier Company can only avoid 182 hours of engineering time and 4,800 hours of setup time that are attributable to Model 1? How does that affect the alternatives presented in Requirement 2? Which alternative is more cost effective and by how much? Do NOT round interim calculations and, if required, round your answer to the nearest dollar. will add $fill in the blank 8723bbfe4004028_5 to operating income
The manufacturer of a product that has a variable cost of $2.50 per unit and total fixed cost of $117,000 wants to determine the level of output necessary to avoid losses. What level of sales is necessary to break-even if the product is sold for $4.35? Round your answer to the nearest whole number. units What will be the manufacturer’s profit or loss on the sales of 104,000 units? Round your answer to the nearest dollar. $ If fixed costs rise to $164,000, what is the new level of sales necessary to break-even? Round your answer to the nearest whole number. units If variable costs decline to $2.25 per unit, what is the new level of sales necessary to break-even? Round your answer to the nearest whole number. units If fixed costs were to increase to $164,000, while variable costs declined to $2.25 per unit, what is the new break-even level of sales? Round your answer to the nearest whole number. units If a major proportion of fixed costs were noncash (depreciation), would…
5. What is the maximum price that Silven should be willing to pay the outside supplier for a box of 24 tubes? 6. Instead of sales of 110,000 boxes of tubes, revised estimates show a sales volume of 150,000 boxes of tubes. At this higher sales volume, Silven would need to rent extra equipment at a cost of $60,000 per year to make the additional 40,000 boxes of tubes. Assuming that the outside supplier will not accept an order for less than 150,000 boxes of tubes, what is the financial advantage (disadvantage) in total (not per box) if Silven buys 150,000 boxes of tubes from the outside supplier? Given this new information, should Silven Industries make or buy the tubes? 7. Refer to the data in Required 6. Assume that the outside supplier will accept an order of any size for the tubes at a price of $1.70 per box. How many boxes of tubes should Silven make? How many boxes of tubes should it buy from the outside supplier?
Use this information for Stryker Industries to answer the question that follow. Stryker Industries received an offer from an exporter for 28,000 units of product at $19 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price $21 Unit manufacturing costs: Variable 10 Fixed 6 What is the amount of income or loss from the acceptance of the offer? a.$588,000 loss b.$532,000 income c.$252,000 income d.$280,000 loss
3. CVP: Atlas Corp, has been asked to submit a bid on supplying underwater masks to Pandora. The company's current cost structure per mask is as follows: DM DL var. MOH var. SGA $9.00 $8.00 $7.50 $4.00 a. Assume that there would be no variable sales commission on this special order. Determine the lowest unit price that Atlas can bid without reducing its current level of operating income. b. Assume the company desires a 38 percent contribution margin ratio from this sale and that a special sales commission of 4 percent of the bid price will be applied to the order instead of its normal $4 variable sales commission. Determine the bid price per unit given these unique circumstances. c. Assume the product fixed costs are $180,000. How many units need to be sold to attain a profit of $249,000?

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