4. Incremental analysis - accepting a special orderEssential Company normally produces and sells 4,000 video monitors forpersonal computers each month. Variable manufacturing costs amount to $62per unit, and fixed manufacturing costs are $170,000 per month. The regularsales price of the monitors is $140 per unit. The company is considering a specialorder from a foreign computer maker to buy an additional 1,000 monitors permonth at a special price of $70 per unit. Filling this special order would not affectEssential Company's regular sales volume or fixed manufacturing costs.(a) The average cost per unit at the 4,000-unit-per-month production level isper unit.$(b) The average cost per unit at the 5,000-unit-per-month production level isper unit.$(c) The amount of increase or decrease (indicate the correct term) in EssentialCompany's operating income that would result from accepting the special order is$

Average cost per unit :— It is calculated by dividing total manufacturing cost by total unit…

Answered: 4. Incremental analysis - accepting a…

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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Answer the following short problems: Wergas, Inc. has determined the following for a given year: Economic order quantity 5,000 units Total cost to place purchase orders for the year P 10,000 Cost to place one purchase order P 50 Cost to carry one unit for 1 year P 4 What is Wergas’ estimated annual usage in units? Alilio Company is planning to build a new plant in Batangas City. The plant is expected to provide additional sales as follows: First Year P 2.0 million Second Year P 2.5 million Third Year P 3.0 million (maximum capacity) The financial manager of Alilio estimates that for every peso of sales, P0.25 must be invested in current assets. If all discounts are taken and bills are paid on time, accounts payable average P 0.04 per peso of sales. Other current liabilities, such as wages payable, typically average P0.05 per peso of sales. Required: Estimate the working capital investments required for the new plant in the 1st, 2nd& 3rd year of operations. How…
1.How many units of scooters, best calls, and rollerblades should summertime Inc. produce? 2.What is the maximum amount summertime and corporate would be willing to pay for another 1200 additional units of fun? info: The demand for the products far exceeds the direct materials available to produce the products. Fun cost $2 per pound and a maximum of 7975 pounds is available each month. Summertime Inc. must produce a minimum of 175 units of each product
Required information Skip to question [The following information applies to the questions displayed below.] JCN Industries normally produces and sells 5,000 keyboards for personal computers each month. Variable manufacturing costs amount to $25 per unit, and fixed costs are $146,000 per month. The regular sales price of the keyboards is $86 per unit. JCN has been approached by a foreign company that wants to purchase an additional 1,000 keyboards per month at a reduced price. Filling this special order would not affect JCN 's regular sales volume or fixed manufacturing costs. Assume that the price offered by the foreign company is $43 per unit. Accepting the special order will cause JCN's operating income to:
Can someone help me with part B of this problem?: Verasource Microprocessor Corporation sells 200 computer chips a month for $1,500 each. variable costs are $1,500,000. Fixed costs are $500,000. there's a defect rate of 8%. What is the hidden cost to the company of making this rate of defectives instead of 2,000 good chips each month? Suppose a six sigma effort can reduce the defects to a six sigma level. what is the impact on profitability?
PLEASE MAKE IT IN EXCEL AND SHOW THE FORMULAS Comercial El Alacrán, S.A., purchases 200,000 units per year of the only product it sells. The cost of each order is $35.00. The annual unit maintenance cost is 23% of its cost of $8.00. The supplier currently takes 5.5 days to deliver, and the company sorts and stores it in 3 days. The company makes significant efforts to shorten these lead times. If it manages to reduce, through an agreement with the supplier, its delivery time to 3.5 days and to do the sorting in 1.5 days, how many units does the decrease in the reorder point amount to?
I need help ! Help please!
Hareshbhai
ABC Corporation resells one type of candle. It has 250 working days. Each day, it sells an average of 500 boxes but may sometimes sell a maximum of 600 boxes. The supplier takes an average of 5 days to deliver the order. During busier times, the supplier may take 7 days.Based on ABC’s records, ordering cost average P400 per order. Storage cost per box average P5 per year. There is also an opportunity cost of 1% per year for every peso invested in inventories. Each box of candles costs P450.If ABC would continue its current inventory management policy, it would keep 10,000 boxes as safety stock and order tendays-worth of inventory.(A) Reorder Point1. What should be the reorder point in boxes?2. How much would the normal lead time usage be?3. How much should ABC keep as safety stock?
Golden Gate Novelties (GGN) sells souvenir key chains at the local airport. GGN charges $12.00 per chain. The variable cost for a chain, including the wholesale cost of the chain, packaging, the commission paid to the airport operator, and so on, is $10.40. The annual fixed cost for GGN is $15,000. Required: a. How many cases must Golden Gate Novelties sell every year to break even? Note: Do not round intermediate calculations. b. The owner of GGN believes that the company can sell 12,500 chains a year. What is the margin of safety in terms of the number of chains? a. Break-even point b. Margin of safety chains chains
Please help correctly stepwise
An all-wood furniture manufacturer operates 8 hours per day for 340 days per year, and has a demand of 2,000 units per day. There are four production cycles per day. Assume the following: 7,700 units produced per day, holding cost per unit is $5 per year, labor rate to do line set-ups is $13 per hour. With quick set-ups, the production line must be quickly re-organized. What is the target set-up cost? Please round to two decimals and do not include a dollar sign. What is the set-up time in minutes? Please round to the nearest two decimals, and do not write the word "minutes" in your answer just enter your number with the two decimals.
I need correct answer and quickly plz

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