To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $14.00 of the overhead is variable with respect to the number of bracelets produced. The company also believes that accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party's order using its existing manufacturing capacity. Required: 1. What is the financial advantage (disadvantage) of accepting the special order from the wedding party? 2. Should the company accept the special order?
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- I keep working this problem over and over and been working on it but cant seem to get it right [The following information applies to the questions displayed below.] Hult Games buys electronic components for manufacturing from two suppliers, Milan Components and Dundee Parts. If the components are delivered late, the shipment to the customer is delayed. Delayed shipments lead to contractual penalties that call for Hult to reimburse a portion of the purchase price to the customer. During the past quarter, the purchasing and delivery data for the two suppliers showed the following. Milan Dundee Total Total purchases (cartons) 98,000 42,000 140,000 Average purchase price (per carton) $ 20.00 $ 22 $ 20.60 Number of deliveries 80 20 100 Percentage of late deliveries 25 % 10 % 22 % The Accounting Department recorded $602,700 as the cost of late deliveries to customers. Required: Assume that the average quality,…The insufficient capacity of SHELLA Craft is due to the availability of manpower that the company is currently lacking. One of the supervisors in the production department, En Shauqi suggested another option to use the service of external agency to recruit and hire workers at a rate of RM30 per hour. The company also will have to pay for transportation allowance for external workers amounting RM15,000. Evaluate the above suggestion. Suggest THREE (3) qualitative factors that need to be considered if the company decided to use the service of external agency.STARTOM Inc, manufactures sporting equipment, including weight-lifting gloves. Anationalsporting goods chain recently submitted a special order for 4,600 pairs of weight-lifting gloves. STARTOM JnC.was not operating at capacity and couldusethe extra business. Unfortunately, the order's offering price of $12.80 per pair was below the costto produce them. The controller was opposedto takingaloss onthe deal. However, the personnel manager arguedin favor of accepting the order even though a loss would be incurred; it would avoid the problem of layoffs andwouldhelp maintainthe community image of the company. The full costto produce a pair of weight-lifting gloves is presented as follows: Direct materials - S7.50; Direct labor- $3.90; Variable overhead -$1.60; Fixed overhead - $3.10; Total - $16.10. No variable and selling or administrative expenses would be associated with the order. Non-unit level activity costs are a small percentage oftotal costs and are therefore not censidered Assume…
- [The following information applies to the questions displayed below.] Watko Entertainment Systems (WES) buys audio and video components for assembling home entertainment systems from two suppliers, Bacon Electronics and Hessel Audio and Video. The components are delivered in cartons. If the cartons are delivered late, the installation for the customer is delayed. Delayed installations lead to contractual penalties that call for WES to reimburse a portion of the purchase price to the customer. During the past quarter, the purchasing and delivery data for the two suppliers showed the following: Bacon Hessel Total Total purchases (cartons) 5,000 3,000 8,000 Average purchase price (per carton) $ 190 $ 206 $ 196 Number of deliveries 40 20 60 Percentage of cartons delivered late. 30% 15% 25% The Accounting Department recorded $263,250 as the cost of late deliveries to customers. Required: Assume that the average quality, measured by the percentage of late deliveries,…Watko Entertainment Systems (WES) buys audio and video components for assembling home entertainment systems from two suppliers, Bacon Electronics and Hessel Audio and Video. The components are delivered in cartons. If the cartons are delivered late, the installation for the customer is delayed. Delayed installations lead to contractual penalties that call for WES to reimburse a portion of the purchase price to the customer. During the past quarter, the purchasing and delivery data for the two suppliers showed the following: Bacon Hessel Total Total purchases (cartons) 5,000 3,000 8,000 Average purchase price (per carton) $ 170 $ 186 $ 176 Number of deliveries 40 20 60 Percentage of cartons delivered late. 30% 15% 25% The Accounting Department recorded $243,750 as the cost of late deliveries to customers. Required: Assume that the average quality, measured by the percentage of late deliveries, and prices from the two companies will continue as in the past. Also…Suppose that you have been given a summer job as an Intern at Issac Alrcams, a company that manufactures sophisticated spy cameras for remote-controlled millitary reconnalssance alrcraft. The company, which is privately owned, has approached a bank for a loan to help finance its growth. The bank requires financlal statements before approving the loan. Requlred: Classify each cost listed below as elther a product cost or a perlod cost for the purpose of preparing financial statements for the bank. Costs Product Cost or Period Cost 1. Depreciation on salespersons' cars. 2. Rent on equipment used in the factory. 3. Lubricants used for machine maintenance. 4. Salaries of personnel who work in the finished goods warehouse. 5. Soap and paper towels used by factory workers at the end of a shift. 6. Factory supervisors' salaries. 7. Heat, water, and power consumed in the factory. 8. Materials used for boxing products for shipment overseas. (Units are not normally boxed.) 9. Advertising costs.…
- Watko Entertainment Systems (WES) buys audio and video components for assembling home entertainment systems from two suppliers, Bacon Electronics and Hessel Audio and Video. The components are delivered in cartons. If the cartons are delivered late, the installation for the customer is delayed. Delayed installations lead to contractual penalties that call for WES to reimburse a portion of the purchase price to the customer. During the past quarter, the purchasing and delivery data for the two suppliers showed the following: Bacon Hessel Total Total purchases (cartons) 5,000 3,000 8,000 Average purchase price (per carton) $ 176 $ 192 $ 182 Number of deliveries 40 20 60 Percentage of cartons delivered late. 30% 15% 25% The Accounting Department recorded $249,600 as the cost of late deliveries to customers. Exercise 10-38 (Algo) Activity-Based Costing of Suppliers (LO 10-3, 4) Required: Assume that the average quality, measured by the percentage of late…Watko Entertainment Systems (WES) buys audio and video components for assembling home entertainment systems from two suppliers, Bacon Electronics and Hessel Audio and Video. The components are delivered in cartons. If the cartons are delivered late, the installation for the customer is delayed. Delayed installations lead to contractual penalties that call for WES to reimburse a portion of the purchase price to the customer. During the past quarter, the purchasing and delivery data for the two suppliers showed the following: Bacon 5,000 $ 192 40 30% Bacon Hessel Hessel 3,000 $ 208 Total purchases (cartons) Average purchase price (per carton) Number of deliveries Percentage of cartons delivered late. The Accounting Department recorded $265,200 as the cost of late deliveries to customers. Effective Cost Per Carton Total 8,000 $ 198 20 15% Required: Assume that the average quality, measured by the percentage of late deliveries, and prices from the two companies will continue as in the…Sundial Company manufactures and sells watches for $42 each. Tick-Tock Company has offered Sundial $30 per watch for a one-time order of 5,600 watches. The total manufacturing cost per watch is $30 per unit and consists of variable costs of $22 per watch and fixed overhead costs of $8 per watch. Assume that Sundial has excess capacity and that the special pricing order would not adversely affect regular sales. What is the change in operating income that would result from accepting the special sales order? O A. decrease of $168,000 O B. increase of $168,000 O C. decrease of $44,800 O D. increase of $44,800
- The Comfy Company manufactures slippers and sells them at $11 a pair. Variable manufacturing cost is a $5 pair, and allocated fixed manufacturing cost is a $3 pair. It has enough idle capacity available to accept a one-time-only special order of 5000 pairs of slippers at $8 a pair. Comfy will not incur any marketing costs as a result of the special order. What would the effect on operating income be if the special order could be accepted without affecting normal sales: (a) $0, (b) $15000 increase, (c) $25000 increase, or (d) $40000 increase? Show your calculations. The HoustonCompany manufactures Part No. 498 for use in its production line. The manufacturing cost per unit for 25,000units of Part No. 498 is as follows: Direct materials $4 Variable direct manufacturing labor 38 Variable manufacturing overhead 15 Fixed manufacturing overhead allocated 18 Total manufacturing cost per unit $75 The Cushion Company has offered to sell…Sundial Company manufactures and sells watches for $44 each. Tick−Tock Company has offered Sundial $25 per watch for a one−time order of 5,700 watches. The total manufacturing cost per watch is $29 per unit and consists of variable costs of $21 per watch and fixed overhead costs of $8 per watch. Assume that Sundial has excess capacity and that the special pricing order would not adversely affect regular sales. What is the change in operating income that would result from accepting the special sales order? A. decrease of $22,800 B. increase of $22,800 C. increase of $142,500 D. decrease of $142,500Diskmar has received a special order for 2,000 units of its product at a special price of $75. The product normally sells for $100 and has the following manufacturing costs:Direct material costs are $30; Direct labor costs are $20; and Variable Overhead costs are $15. Assume that Diskmar has sufficient capacity to fill the order without harming normal production and sales. a. If Diskmar accepts the order, what effect will the order have on the company's short-term profit? b. What minimum price should Diskmar charge to achieve a $25,000 incremental profit? c. Now assume Diskmar is currently operating at full capacity and cannot fill the order without harming normal production and sales. If Diskmar accepts the order, what effect will the order have on the company's short-term profit?