#5. The following information was developed for Beta Company for the year ended December 31, 2018. Sales $1,000,000 $540,000 Variable Expenses Contribution Margin Fixed Expenses $460,000 $285,000 Net Income $175,000 Beta expected to sell 500,000 cans of fish food by the end of the year. The local conservation society asked Beta if they could supply 70,000 cans at $1 each. Beta's CEO would like to help out but he is concerned about the impact on the bottom line. He asks you to prepare an analysis using the contribution margin technique (Special order technique) and provide him your recommendation. This is within Beta's capacity to fill.

#5. The following information was developed for Beta Company for the year ended December 31, 2018. Sales $1,000,000 $540,000 Variable Expenses Contribution Margin Fixed Expenses $460,000 $285,000 Net Income $175,000 Beta expected to sell 500,000 cans of fish food by the end of the year. The local conservation society asked Beta if they could supply 70,000 cans at $1 each. Beta's CEO would like to help out but he is concerned about the impact on the bottom line. He asks you to prepare an analysis using the contribution margin technique (Special order technique) and provide him your recommendation. This is within Beta's capacity to fill.

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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Assume Rajan Manufacturing Ltd makes sports vest for local soccer, baseball, basketball, and other sports teams. Rajan, the owner, purchases the vests and prints graphics on the vests for each team. The graphics were designed several years ago, so design costs are no longer incurred. On average, Rajan sells 1,000 vests each month. Typical monthly financial data is shown below: Per Unit Total Monthly Data at 1,000 Vests Sales revenue $20 $20 000 Variable costs: Direct materials $8 $8 000 Direct labour 2 2 000 Manufacturing overhead 3 13 3 000 13 000 Contribution margin $ 7 $ 7 000 Fixed costs (rent, salaries, etc.) 4 000 Profit $ 3 000 The monthly information provided relates to the company’s routine monthly operations. A representative of the local university recently approached Rajan to ask about a one-time special order. The university will be hosting a state-wide soccer event and is willing to pay Rajan’s Manufacturing $17 per shirt to make 200 custom vests for…
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Assume Rajan Manufacturing Ltd makes sports vest for local soccer, baseball, basketball, and other sports teams. Rajan, the owner, purchases the vests and prints graphics on the vests for each team. The graphics were designed several years ago, so design costs are no longer incurred. On average, Rajan sells 1,000 vests each month. Typical monthly financial data is shown below: Per Unit Total Monthly Data at 1,000 Vests Sales revenue $20 $20 000 Variable costs: Direct materials $8 $8 000 Direct labour 2 2 000 Manufacturing overhead 3 13 3 000 13 000 Contribution margin $ 7 $ 7 000 Fixed costs (rent, salaries, etc.) 4 000 Profit $ 3 000 The monthly information provided relates to the company’s routine monthly operations. A representative of the local university recently approached Rajan to ask about a one-time special…
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