For Items 7-8Alex Company is a manufacturer of electronic switches. One of their products, "Sensory Switch," is usedas a component of most electrical appliances.Sensory switch has the following financial dataSelling PriceVariableCosts:MaterialsLaborperunit:Factory OverheadShipping and Handling2418 15'18060Fixed Costs:Factory Overhead36SellingandAdministrative1450Total110Page 3 of 4During the month, Alex has received a special, one-time order for 1,500 units of Sensory Switch.7. Assuming that the company has excess capacity that is enough to produce this special orderwithout affecting sales to regular customers, and the company wants to improve its profitability,the price that is acceptable for this special, one-time order is in excess ofa. P180.b. P110.c. P60.d. P50.CORY8. Assuming that Alex is operating at full capacity and that it does not want to incur a loss from thisorder, the minimum acceptable price isa. P180.b. P110.C. P60.d. P50.

Answer 7: To determine the minimum acceptable price for the special, one-time order, we need to…

Answered: For Items 7-8 Alex Company is 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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Cortez Company sells chairs that are used at computer stations. Its beginning Inventory of chairs was 230 units at $44 per unit. During the year, Cortez made two batch purchases of this chair. The first was a 295-unit purchase at $49 per unit; the second was a 355-unit purchase at $51 per unit. During the period, It sold 585 chairs. Required Determine the amount of product costs that would be allocated to cost of goods sold and ending Inventory, assuming that Cortez uses a. FIFO b. LIFO c. Weighted average. (Do not round Intermediate calculations. Round your final answers to nearest whole dollar amount.) Cost of goods sold Ending inventory FIFO 0.120 LIFO Weighted Average
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Sweet Nature Corporation manufactures “Sweet ‘n Salty” trail mix. Last month, the company produced and sold 800,000 units and sold them at a price of $4 each. Related information appears below:Item Total CostUtilities for factory $17,000 Advertising (based on number of website page views) 22,000 Costs for product packaging 125,000 Chocolate pieces and dried fruit 152,800 Wages for factory cleaning staff 275,000 Rent of factory and equipment 350,000 Salaries for office staff 475,000 Wages for production crew 486,000 Insurance on the factory 18,000 Nuts (e.g. peanuts, cashews and almonds) 878,950 Required:a. Identify all costs above as either a product cost (specifically DM, DL or OH) or a period cost (PC).b. The company uses the cost-plus approach to pricing and wants to achieve an approximate profit of 25 percent. Did it meet its profit objective last month? Briefly explain. Regardless, what two specific actions would you recommend to improve its profitability Prepare a CVP income…
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Brightstone Tire and Rubber Company has capacity to produce 272,000 tires. Brightstone presently produces and sells 208,000 tires for the North American market at a price of $111 per tire. Brightstone is evaluating a special order from a European automobile company, Euro Motors. Euro is offering to buy 32,000 tires for $91.65 per tire. Brightstone's accounting system indicates that the total cost per tire is as follows: Direct materials $42 Direct labor 16 Factory overhead (60% variable) 26 Selling and administrative expenses (40% variable) 22 Total $106 Brightstone pays a selling commission equal to 5% of the selling price on North American orders, which is included in the variable portion of the selling and administrative expenses. However, this special order would not have a sales commission. If the order was accepted, the tires would be shipped overseas for an additional shipping cost of $6 per tire. In addition, Euro has made the order conditional on receiving…
Top Wood is a small manufacturing company currently making a single type of chair. The managing director presents to you the following details of estimated revenue and cost per unit for the year ended 31 December 2021: Quantity (Units) 2,000 Number of Chairs made and sold Price unit per (RM) 100 Selling price Total variable cost per unit: RM Raw material 15 Direct labour 16 Manufacturing overheads Selling cost 11 8 The following information is taken into consideration: (1) Total manufacturing overheads cost estimated for the year amounting to $110,000 of which 20% is variable manufacturing overhead cost. The company's total selling costs for the year amounting to $19,500 inclusive of fixed and variable costs. (2) (3) All units produced can be sold as soon as they are made, and no stocks are kept. (4) The directors have been considering their plan for the year ending 31 December 2021. The company intends to increase the sales by 30% if the fixed selling costs increase by $14,964 and the…
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