Answered: Homestead Jeans Co. has an annual plant…

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 13E

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Transcribed Image Text:arder eBook Revenues Costs: Decision on Accepting Additional Business Homestead Jeans Co. has an annual plant capacity of 65,900 units, and current production is 45,000 units. Monthly fixed costs are $40,300, and variable costs are $25 per unit. The present selling price is $34 per unit. On November 12 of the current year, the company received an offer from Dawkins Company for 13,000 units of the product at $27 each. Dawkins Company will market the units in a foreign country under its own brand name. The additional business is not expected to affect the domestic selling price or quantity of sales of Homestead Jeans Co. a. Prepare a differential analysis dated November 12 on whether to Reject Order (Alternative 1) or Accept Order (Alternative 2). If an amount is zero, enter zero "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Variable manufacturing costs Profit (loss) Print Item Feedback Differential Analysis Reject Order (Alt. 1) or Accept Order (Alt. 2) November 12 ogress-true Reject Accept Order Differential Effects Order (Alternative 1) (Alternative 2) (Alternative 2) b. Having unused capacity available is Check My Work 790,400 c. What is the minimum price per unit that would produce Check My Work a. Subtract the additional costs from the additional revenues for accepting the order. O Σ X 100 to this decision. The differential revenue is positive contribution margin? Round your answer to two decimal places. C B G Q D 3 than the differential cost. Thus, accepting this additional business will result in a net Coming December 9th - 16h Love and Monsters-Watch the tra 00 Dec 8 2:24

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