Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 103,200 units per year is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $ 2.00 $ 4.00 $ 0.70 $ 3.85 $ 1.50 $ 3.00 The normal selling price is $22.00 per unit. The company's capacity is 116,400 units per year. An order has been received from a mail- order house for 1,100 units at a special price of $19.00 per unit. This order would not affect regular sales or the company's total fixed costs. Required: 1. What is the financial advantage (disadvantage) of accepting the special order? 2. As a separate matter from the special order, assume the company's inventory includes 1,000 units of this product that were produced last year and that are inferior to the current model. The units must be sold through regular channels at reduced prices. The company does not expect the selling of these inferior units to have any effect on the sales of its current model. What unit cost is relevant for establishing a minimum selling price for the inferior units?

Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 103,200 units per year is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $ 2.00 $ 4.00 $ 0.70 $ 3.85 $ 1.50 $ 3.00 The normal selling price is $22.00 per unit. The company's capacity is 116,400 units per year. An order has been received from a mail- order house for 1,100 units at a special price of $19.00 per unit. This order would not affect regular sales or the company's total fixed costs. Required: 1. What is the financial advantage (disadvantage) of accepting the special order? 2. As a separate matter from the special order, assume the company's inventory includes 1,000 units of this product that were produced last year and that are inferior to the current model. The units must be sold through regular channels at reduced prices. The company does not expect the selling of these inferior units to have any effect on the sales of its current model. What unit cost is relevant for establishing a minimum selling price for the inferior units?

Name: Please Do not Give image format Required 1 Required 2What is the finan
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: Please Do not Give image format Required 1 Required 2What is the financial advantage (disadvantage) of accepting the special order?Required 1Required 2Show Transcribed TextŰRelevant cost per unit< Required 1< Required 1ĊAs a separate matter from the

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 6BE

See similar textbooks

Similar questions

Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 105,600 units per year is: $ 2.40 $ 3.00 $ 0.80 $ 4.55 $ 2.00 $ 2.00 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses The normal selling price is $18.00 per unit. The company's capacity is 138,000 units per year. An order has been received from a mail- order house for 2,700 units at a special price of $15.00 per unit. This order would not affect regular sales or the company's total fixed costs. Required: 1. What is the financial advantage (disadvantage) of accepting the special order? 2. As a separate matter from the special order, assume the company's inventory includes 1,000 units of this product that were produced last year and that are inferior to the current model. The units must be sold through regular…
Following information is related to Product X of Zempa Company: Current replacement cost $230 Cost to distribute $42 Historical cost Normal profit margin Selling price $215 $36 $245 If lower-of-cost-or-market rule (LCM Rule) is applied, then the value of Product X that would be reported in the balance sheet is: a. $215 b. $230 C. $203 d. S167
Kubin Company's relevant range of production is 11,000 to 14,000'units. When it produces and sells 12,500 units, its average costs per unit are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense Average Cost per Unit $ 7.20 $ 4.20 $ 1.70 $ 5.20 $ 3.70 $ 2.70 $ 1.20 $ 0.70 Required: 1. What is the incremental manufacturing cost incurred if the company increases production from 12,500 to 12,501 units? 2. What is the incremental cost incurred if the company increases production and sales from 12,500 to 12,501 units? 3. Assume that Kubin Company produced 12,500 units and expects to sell 12,280 of them. If a new customer unexpectedly emerges and expresses interest in buying the 220 extra units that have been produced by the company and that would otherwise remain unsold, what is the incremental manufacturing cost per unit incurred to sell…
Home * CengageNOWv2 | Online teachin x takeAssignment/takeAssignmentMain.do?invoker-&takeAssignmentSessionLocator=&inprogress=false еВook B Show Me How Print Item Sales Mix and Break-Even Analysis Conley Company has fixed costs of $17,802,000. The unit selling price, variable cost per unit, and contribution margin per unit for the company's two products follow: Product Model Selling Price Variable Cost per Unit Contribution Margin per Unit Yankee $180 $99 $81 Zoro 225 135 90 The sales mix for products Yankee and Zoro is 80% and 20%, respectively. Determine the break-even point in units of Yankee and Zoro. a. Product Model Yankee units b. Product Model Zoro units
Home CengageNOWv2| Online teachin X akeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false еВook | Show Me How Print Item Target Profit Beard Company sells a product for $15 per unit. The variable cost is 10 per unit, and fixed costs are 1,750,000. Determine (a) the break-even point in sales units and (b) the sales units required for the company to achieve a target profit of $400,000. a. Break-even point in sales units X units b. Break-even point in sales units required for the company to ach ve a target profit of $400 X units Feedback Check My Work a. Unit sales price minus unit variable costs equals unit contribution margin. Fixed costs divided by unit contribution margin = break-even point in units. b (Fixed costs Target profit) divided by unit contribution margin = sales units.
Current Attempt in Progress Wildhorse Company is a multiproduct firm. Presented below is information concerning one of its products, the Hawkeye. Date 1/1 2/4 2/20 4/2 11/4 (a) Transaction Beginning inventory Purchase Sale Purchase Sale Quantity Price/Cost 2,800 Your answer is incorrect. 3,800 Weighted-average cost per unit 4,300 4,800 4,000 $17 $ 26 43 33 Calculate the weighted-average cost per unit. (Round answer to 4 decimal places, e.g. 2.7613.) 48 REFERA montierung MO
Required A Required B Assume that only one product is being sold in each of the four following case situations: Case #1 Case #2 Case #3 Case #4 Unit sold 8,200 20,800 5,500 Sales $ 237,800 $ 360,000 $ 192,500 Variable expenses 114,800 291,200 Fixed expenses 89,000 173,000 73,000 Net operating income (loss) 37,000 $ 147,800 $ 37,000 Contribution margin per unit $ 14 $ 11
O Problem Set: Module 4 1. EX.06.01 2. PR.06.02A ALGO 3. BE.06.02.ALGO 4. BE.06.03.ALGO cengagenow.com ● Portmann Company, operating at full capacity, sold 1,000,000 units at a price of $188 per unit during the current year. Its income statement is as follows: Sales Cost of goods sold Gross profit Expenses: Selling expenses Administrative expenses Total expenses Cost of goods sold Selling expenses Administrative expenses Total variable costs Total fixed costs $16,000,000 10,600,000 Operating income The division of costs between variable and fixed is as follows: Fixed Unit variable cost Unit contribution margin + 40 Variable 70% 75% 50% $188,000,000 (101,000,000) $87,000,000 (26,600,000) $60,400,000 Management is considering a plant expansion program for the following year that will permit an increase of $11,280,000 in yearly sales. The expansion will increase fixed costs by $5,000,000 but will not affect the relationship between sales and variable costs. Required: 1. Determine the…
Fill in the missing amounts in each of the eight case situations below. Each case is independent of the others. Required: a. Assume that only one product is being sold in each of the four following case situations: Case 1 Case 2 Case 3 Case 4 Units sold 9,500 20,100 5,400 Sales $256,500 $319,000 $135,000 Variable expenses 133,000 201,000 Fixed expenses 91,000 170,000 78,000 Net operating income (loss) $18,500 $193,400 $(45,600) Contribution margin per unit $13 $14
Enabled: Midterm 2 i C Cost The following information pertains to one item of inventory of the Simon Company. Saved Per unit $ 200 170 190 10 30 Replacement cost Selling price Disposal costs Normal profit margin Using the lower of cost or market method, this item should be valued at:
Aj.2 Required information Skip to question [The following information applies to the questions displayed below.] Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales $ 100,000 Variable expenses 65,000 Contribution margin 35,000 Fixed expenses 30,100 Net operating income $ 4,900 5. If sales decline to 900 units, what would be the net operating income? Note: Round "Per Unit" calculations to 2 decimal places.
TB MC Qu. 15-51 (Algo) Division X makes a part that it... Division X makes a part that It sells to customers outside of the company. Data concerning this part appear below Selling price to outside customers Variable cost per unit Total fixed costs %$4 78 $4 44 $470,000 32,000 Capacity in units Division Y of the same company would like to use the part manufactured by Division X in one of its products. Division Y currently purchases a similar part made by an outside company for $77 per unit and would substitute the part made by Division X. Division Y requires 7,800 units of the part each period. Division X can sell all of the units it makes to outside customers. What is the lowest acceptable transfer price from the standpoint of the selling division? %24