FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
Bartleby Related Questions Icon

Related questions

Question
Order from Custco-Medical: 5,500 units at $570 per unit with deluxe mask
$59 per unit.
• Order from Laboratory-Apex: 4,500 units at $635 per unit with standard
mask $45 per unit.
Since these orders were made directly to Taino Ventilators, Inc., no variable selling
costs will be incurred.
1. Analyze the profitability of each of these two special orders.
2. Which special order should be accepted?
3. What other aspects need to be considered in addition to profitability?
expand button
Transcribed Image Text:Order from Custco-Medical: 5,500 units at $570 per unit with deluxe mask $59 per unit. • Order from Laboratory-Apex: 4,500 units at $635 per unit with standard mask $45 per unit. Since these orders were made directly to Taino Ventilators, Inc., no variable selling costs will be incurred. 1. Analyze the profitability of each of these two special orders. 2. Which special order should be accepted? 3. What other aspects need to be considered in addition to profitability?
Cost Problem
Taino Ventilators, Inc. makes a variety of ventilators. One of these products is a
Ventilators model: Super Air-XL. This model includes the ultimate in technology and is in
strong demand. Expected demand for this year is 57,000 units. Full production capacity
for SuperAir--XL is 64,000 units, but 57,000 units are considered normal capacity. The
following unit price and breakdown is applicable in 2022:
Per Unit
Sales Price
Less manufacturing costs:
$685.00
Materials
$66.00
$22.00
$23.00
$26.00
$137.00
$548.00
Direct Labor
Overhead: Variable
Fixed
Total manufacturing costs
Gross Margin
Less selling and administrative expenses
Selling: Variable
Fixed
Administrative, Fixed
Masks Options, variable*
Total selling and administrative expenses
|Net Profit before taxes
$5.00
$46.00
$72.00
$59.00
$182.00
$366.00
During December, the company received 2 special orders request from: Custco-Medical
and Laboratory-Apex. These orders are not part of the budgeted 57,000 units sales of
SuperAir -XL for 2022, but there is sufficient capacity for possibly one order to be
accepted. Orders received and their terms are:
expand button
Transcribed Image Text:Cost Problem Taino Ventilators, Inc. makes a variety of ventilators. One of these products is a Ventilators model: Super Air-XL. This model includes the ultimate in technology and is in strong demand. Expected demand for this year is 57,000 units. Full production capacity for SuperAir--XL is 64,000 units, but 57,000 units are considered normal capacity. The following unit price and breakdown is applicable in 2022: Per Unit Sales Price Less manufacturing costs: $685.00 Materials $66.00 $22.00 $23.00 $26.00 $137.00 $548.00 Direct Labor Overhead: Variable Fixed Total manufacturing costs Gross Margin Less selling and administrative expenses Selling: Variable Fixed Administrative, Fixed Masks Options, variable* Total selling and administrative expenses |Net Profit before taxes $5.00 $46.00 $72.00 $59.00 $182.00 $366.00 During December, the company received 2 special orders request from: Custco-Medical and Laboratory-Apex. These orders are not part of the budgeted 57,000 units sales of SuperAir -XL for 2022, but there is sufficient capacity for possibly one order to be accepted. Orders received and their terms are:
Expert Solution
Check Mark
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education