Rowe Tool and Die (RTD) produces metal fittings as a supplier to various manufacturing firms in the area. The following is theforecasted income statement for the next quarter, which is the typical planning horizon used at RTD. RTD expects to sell 45,000units during the quarter. RTD carries no inventories.Sales revenueCosts of fitting producedGross profitAdministrative costsOperating profitAmount$ 1,170,000900,000$ 270,000207,000$ 63,000Per Unit$26.0020.00$ 6.004.60$ 1.40Fixed costs included in this income statement are $292,500 for depreciation on plant and machinery and miscellaneous factoryoperations and $94,500 for administrative costs. RTD has received a request for 10,000 fittings to be produced in the next quarterfrom Endicott Manufacturing. Endicott has never purchased from RTD, although they have been a local company for many years.Endicott has offered to pay $20 per unit. RTD can easily produce the 10,000 units with its existing capacity. Production of the10,000 units will incur all variable manufacturing costs but no fixed manufacturing costs. No administrative costs will be incurredbecause of the order. Required:a. What impact would accepting this special order have on operating profit?b. Should RTD accept the order?Complete this question by entering your answers in the tabs below.Required A Required BWhat impact would accepting this special order have on operating profit? (Enter your answers in thousands rounded to 1decimal place. (i.e., 5,400,400 should be entered as 5,400.4). Select option "higher" or "lower", keeping Status Quo as thebase. Select "none" if there is no effect.)Sales revenueVariable costs:ProductionAdministrativeContribution marginFixed costsOperating profitStatus Quo 45,000 Alternative 55,000UnitsUnits$ 1,170,000.0 $$270,000Costs and Revenues(Thousands of Dollars)63,000.0 $Required A26.0 $61.4Difference45,000.0Required B

Operating Profit -The revenue generated by a company's main activities, minus any financing or…

Answered: owe Tool and Die (RTD) produces metal…

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 16E

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Wellington, Inc., reports the following contribution margin income statement for the month of May. The company has the opportunity to purchase new machinery that will reduce its variable cost per unit by $10 but will increase fixed costs by 20%. Prepare a projected contribution margin income statement for Wellington, Inc., assuming it purchases the new equipment. Assume sales level remains unchanged.
The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include: Fixed costs (salaries, tools): 64,900 per year Variable costs (supplies): 1.35 per maintenance hour Estimated usage by: Actual usage by: Required: 1. Calculate a single charging rate for the Maintenance Department. 2. Use this rate to assign the costs of the Maintenance Department to the user departments based on actual usage. Calculate the total amount charged for maintenance for the year. 3. What if the Assembly Department used 4,000 maintenance hours in the year? How much would have been charged out to the three departments?
Olivian Company wants to earn 420,000 in net (after-tax) income next year. Its product is priced at 275 per unit. Product costs include: Variable selling expense is 14 per unit; fixed selling and administrative expense totals 290,000. Olivian has a tax rate of 40 percent. Required: 1. Calculate the before-tax profit needed to achieve an after-tax target of 420,000. 2. Calculate the number of units that will yield operating income calculated in Requirement 1 above. (Round to the nearest unit.) 3. Prepare an income statement for Olivian Company for the coming year based on the number of units computed in Requirement 2. 4. What if Olivian had a 35 percent tax rate? Would the units sold to reach a 420,000 target net income be higher or lower than the units calculated in Requirement 3? Calculate the number of units needed at the new tax rate. (Round dollar amounts to the nearest dollar and unit amounts to the nearest unit.)
Using the information in the previous exercises about Marleys Manufacturing, determine the operating income for department B, assuming department A sold department B 1,000 units during the month and department A reduces the selling price to the market price.
Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90. The companys monthly fixed expenses are $180,000. What is the companys break-even point in units? What is the companys break-even point in dollars? Prepare a contribution margin income statement for the month of October when they will sell 10,000 units. How many units will Cadre need to sell in order to realize a target profit of $300,000? What dollar sales will Cadre need to generate in order to realize a target profit of $300,000? Construct a contribution margin income statement for the month of August that reflects $2,400,000 in sales revenue for Cadre, Inc.
Rowe Tool and Die (RTD) produces metal fittings as a supplier to various manufacturing firms in the area. The following is the forecasted income statement for the next quarter, which is the typical planning horizon used at RTD. RTD expects to sell 49,000 units during the quarter. RTD carries no inventories. Sales revenue Costs of fitting produced Gross profit Administrative costs Operating profit Amount $ 1,332,800 1,019, 200 $ 313,600 235, 200 $ 78,400 Required A Per Unit Fixed costs included in this income statement are $318,500 for depreciation on plant and machinery and miscellaneous factory operations and $96,500 for administrative costs. RTD has received a request for 10,000 fittings to be produced in the next quarter from Endicott Manufacturing. Endicott has never purchased from RTD, although they have been a local company for many years. Endicott has offered to pay $20.40 per unit. RTD can easily produce the 10,000 units with its existing capacity. Production of the 10,000…
Rowe Tool and Die (RTD) produces metal fittings as a supplier to various manufacturing firms in the area. The following is the forecasted income statement for the next quarter, which is the typical planning horizon used at RTD. RTD expects to sell 61,000 units during the quarter. RTD carries no inventories. Sales revenue Costs of fitting produced Gross profit Administrative costs Operating profit Required A Fixed costs included in this income statement are $396,500 for depreciation on plant and machinery and miscellaneous factory operations and $102,500 for administrative costs. RTD has received a request for 10,000 fittings to be produced in the next quarter from Endicott Manufacturing. Endicott has never purchased from RTD, although they have been a local company for many years. Endicott has offered to pay $21.60 per unit. RTD can easily produce the 10,000 units with its existing capacity. Production of the 10,000 units will incur all variable manufacturing costs but no fixed…
Rowe Tool and Die (RTD) produces metal fittings as a supplier to various manufacturing firms in the area. The following is the forecasted income statement for the next quarter, which is the typical planning horizon used at RTD. RTD expects to sell 47,000 units during the quarter. RTD carries no inventories. Sales revenue Costs of fitting produced Gross profit Administrative costs Operating profit Amount $ 1,250, 200 958, 800 $ 291,400 220,900 $ 70,500 Per Unit $ 26,60 20.40 $6.20 4.70 $ 1.50 Fixed costs included in this income statement are $305,500 for depreciation on plant and machinery and miscellaneous factory operations and $95,500 for administrative costs. RTD has received a request for 10,000 fittings to be produced in the next quarter from Endicott Manufacturing. Endicott has never purchased from RTD, although they have been a local company for many years. Endicott has offered to pay $20.20 per unit. RTD can easily produce the 10,000 units with its existing capacity. Production…
Rowe Tool and Die (RTD) produces metal fittings as a supplier to various manufacturing firms in the area. The following is the forecasted income statement for the next quarter, which is the typical planning horizon used at RTD. RTD expects to sell 46,000 units during the quarter. RTD carries no inventories. Sales revenue Costs of fitting produced Gross profit Administrative costs Operating profit Amount $ 1,209,800 929,200 $280,600 213,900 $ 66,700 Per Unit $ 26.30 20.20 $ 6.10 4.65 $ 1.45 Fixed costs included in this income statement are $299,000 for depreciation on plant and machinery and miscellaneous factory operations and $95,000 for administrative costs. RTD has received a request for 10,000 fittings to be produced in the next quarter from Endicott Manufacturing. Endicott has never purchased from RTD, although they have been a local company for many years. Endicott has offered to pay $20.10 per unit. RTD can easily produce the 10,000 units with its existing capacity. Production…
Rowe Tool and Die (RTD) produces metal fittings as a supplier to various manufacturing firms in the area. The following is the forecasted income statement for the next quarter, which is the typical planning horizon used at RTD. RTD expects to sell 62,000 units during the quarter. RTD carries no inventories. Amount Per Unit Sales revenue $ 1,928,200 $ 31.10 Costs of fitting produced 1,450,800 23.40 Gross profit $ 477,400 $ 7.70 Administrative costs 337,900 5.45 Operating profit $ 139,500 $ 2.25 Fixed costs included in this income statement are $403,000 for depreciation on plant and machinery and miscellaneous factory operations and $103,000 for administrative costs. RTD has received a request for 10,000 fittings to be produced in the next quarter from Endicott Manufacturing. Endicott has never purchased from RTD, although they have been a local company for many years. Endicott has offered to pay $21.70 per unit. RTD can easily produce the 10,000 units with its…
Rowe Tool and Die (RTD) produces metal fittings as a supplier to various manufacturing firms in the area. The following is the forecasted income statement for the next quarter, which is the typical planning horizon used at RTD. RTD expects to sell 45,000 units during the quarter. RTD carries no inventories. Amount Per Unit Sales revenue $ 1,170,000 $ 26.00 Costs of fitting produced 900,000 20.00 Gross profit $ 270,000 $ 6.00 Administrative costs 207,000 4.60 Operating profit $ 63,000 $ 1.40 Fixed costs included in this income statement are $292,500 for depreciation on plant and machinery and miscellaneous factory operations and $94,500 for administrative costs. RTD has received a request for 10,000 fittings to be produced in the next quarter from Endicott Manufacturing. Endicott has never purchased from RTD, although they have been a local company for many years. Endicott has offered to pay $20 per unit. RTD can easily produce the 10,000 units with its existing…
Rowe Tool and Die (RTD) produces metal fittings as a supplier to various manufacturing firms in the area. The following is the forecasted income statement for the next quarter, which is the typical planning horizon used at RTD. RTD expects to sell 45,000 units during the quarter. RTD carries no inventories. Amount Per Unit Sales revenue $ 1,170,000 $ 26.00 Costs of fitting produced 900,000 20.00 Gross profit $ 270,000 $ 6.00 Administrative costs 207,000 4.60 Operating profit $ 63,000 $ 1.40 Fixed costs included in this income statement are $292,500 for depreciation on plant and machinery and miscellaneous factory operations and $94,500 for administrative costs. RTD has received a request for 10,000 fittings to be produced in the next quarter from Endicott Manufacturing. Endicott has never purchased from RTD, although they have been a local company for many years. Endicott has offered to pay $20 per unit. RTD can easily produce the 10,000 units with its existing…

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