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$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.

$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.

FINANCIAL ACCOUNTING
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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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?
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:
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:
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