QS 23-15 Special offer LO P7 Radar Company sells bikes for $530 each. The company currently sells 4.150 bikes per year and could make as many as 4,450 bikes per year. The bikes cost $265 each to make: $155 in variable costs per bike and $110 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 300 bikes for $500 each. Incremental fixed costs to make this order are $41,000. No other costs will change if this order is accepted. Compute Radar's additional income (ignore taxes) if it accepts this order. Incremental Incremental Incremental
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- QS 25-20 (Algo) Special offer pricing LO P7 Radar Company sells bikes for $520 each. The company currently sells 4,450 bikes per year and could make as many as 4,800 bikes per year. The bikes cost $285 each to make: $190 in variable costs per bike and $95 of fixed costs per bike. Radar receives an offer from a potential customer who wants to buy 350 bikes for $480 each. Incremental fixed costs to make this order are $100 per bike. No other costs will change if this order is accepted. (a) Compute the income for the special offer. (b) Should Radar accept this offer? (a) Special offer analysis Contribution margin Income (b) The company should Per Unit TotalQS 25-15 Special offer LO P7 Radar Company sells bikes for $480 each. The company currently sells 4,200 bikes per year and could make as many as 4,540 bikes per year. The bikes cost $275 each to make: $175 in variable costs per bike and $100 of fixed costs per bike. Radar received an offer from a potential customer who wants to buy 340 bikes for $450 each. Incremental fixed costs to make this order are $47,000. No other costs will change if this order is accepted. Compute Radar's additional income (ignore taxes) if it accepts this order. Incremental Amount per Fixed Costs Unit Incremental Incremental Income from New Business Contribution margin Incremental income (loss) from new business The company shouldesc QU ON 26 Wok Around the Clock, Inc., sells specialty woks. In the current year it expects to incur $800,000 in variable costs and $130,000 in fixed costs to make and sell 10,000 woks at $100 each. If Wok Around the Clock accepts a special order from Hard Wok Cafe to purchase 1,000 woks at $75. Wok Around the Clock will also have to pay $1,200 in shipping costs to deliver the special order. How much would it make or lose on this special order? ENTER A LOSS WITH A "-"SIGN. DO NOT USE PARENTHESES. EXAMPLE: -1,000 Click Save and Submit to save and submit. Click Save All Answers to save all answers. 1 J J Q A 1 N 2 W S #3 X H E D $ 4 C R 07 dº % 5 F MacBook Pro T V < 60 G Y 7 H B 00 * U 8 J N 60 . к Save O M
- Homework i 5 A Radar Company sells bikes for $540 each. The company currently sells 4,400 bikes per year and could make as many as 4,750 bikes per year. The bikes cost $250 each to make: $160 in variable costs per bike and $90 of fixed costs per bike. Radar receives an offer from a potential customer who wants to buy 350 bikes for $510 each. Incremental fixed costs to make this order are $90 per bike. No other costs will change if this order is accepted. (a) Compute the income for the special offer. (b) Should Radar accept this offer? (a) Special offer analysis O Contribution margin Income (b) The company should :: FI @ 2 W S F2 # 3 E Per Unit 80 F3 MAR 29 $ 4 R Total a F4 % 5 Autoch U 8 DII FB 1 1 alı ( DD 9 F9 ) O A F10 H J K LProblem 1 a Reuben’s Deli currently makes rolls for deli sandwiches it produces. It uses 30,000 rolls annually in the production of deli sandwiches. The costs to make the rolls are: A potential supplier has offered to sell Reuben the rolls for $0.90 each. If the rolls are purchased, 30% of the fixed overhead could be avoided. If Reuben accepts the offer, what will the effect on profit be? Relevant Costs Materials $0.24 Labor $0.40 Variable Overhead $0.16 Fixed Overhead (30% of $.20) $0.06 - Total Cost (30,000 Rolls Per Year) - Offer by Supplier $0.90 Total Cost (30,000 Rolls Per Year) - Continue Manufaturing $- Purchase from Supplier $- Increase/Decrease in Profit $-PROBLEM 14 (SPECIAL ORDER) The waterbed company manufactures several types of waterbeds expecting a jump in demand for its product. The company built a large plant with 1,250 units that currently is being utilized at 80% of capacity. A salesman brings in an offer from a large motel chain to purchase 200 heated king-size waterbeds for a price of Rs.550 each. Normal selling price for the bed is Rs.1,200 each. The schedule of the present costs of the king-size waterbeds for the current year's production was as follows: Acceptance of the order would cause no increase in any fixed cost. Costs for 1000 Units Unit Cost Direct Materials Rs. 3,00,000 Rs. 300 Direct Labour 1,00,000 100 Manufacturing Overhead (40% variable) 2,00,000 200 Marketing (1/3 variable) Administrative (10% variable) 3,00,000 300 1,00,000 100 Total Rs.10,00,000 Rs.1,000 Required: (a) Should the company accept the offer? (b) Would your answer to be change if sales commission of Rs. 50 a bed could be eliminated on this…
- Question 10 of 16 Digital Displays Inc. makes computer monitors and sells them for $365 each. To break even, it needs to sell 600 monitors per month. If the fixed costs are $86,000 per month, what are the variable costs per monitor? Round down to the nearest centChapter 7 Problem Solution 1 Please select the correct answer and solve and explain. "Goodstone Tire Corp sells tires for $90 each. Per unit costs associated with producing and selling the tires are: Direct Materials $35 Direct Labor $10 Factory Overhead $20 The variable portion of the factory overhead is $8 per unit. A foreign company wants to purchase 1,000 tires for $65 each. Assuming Goodstone has excess capacity: 1) The incremental profit from special order will be $12,000 2) The incremental loss from the special order will be $25,000 3) The will be no incremental loss or profit from the special orderQuestion 15 of 16 Elise and her friend Eloi developed an online car repair training course and sell it for $69 per course. The contribution margin per course is $26 and to break even they need to have a total revenue of $12,420 per annum. a. What is the break-even volume? Round up to the next whole number b. What is the fixed costs per annum? Round to the nearest cent c. What is the total revenue if they sell 3,020 courses this year?
- 8.5 Special order pricing Marston Manufacturing has an annual capacity of 85,000 units per year. Currently, the company is making and selling 78,000 units a year. The normal sales price is $120 per unit, cariable costs are $90 per unit, and total fixed expenses are $2,000,000. an out of state distributor has offered to buy 12,000 units at $105 per unit. Marston's cost structure should not change as the result of this special order. REQUIRED By how much will Marstonsincome change if the company accepts this order?Calculating breakeven point for two products Scotty’s Scooters plans to sell a standard scooter for $55 and a chrome scooter for $70. Scotty’s purchases the standard scooter for $30 and the chrome scooter for $40. Scotty’s expects to sell one standard scooter for every three chrome scooters. Scotty’s monthly fixed costs are $23,000. Requirements How many of each type of scooter must Scotty’s Scooters sell each month to break even? How many of each type of scooter must Scotty’s Scooters sell each month to earn $25,300? 3 Suppose Scotty’s expectation to sell one standard scooter for every three chrome scooters was incorrect and for every four scooters sold two are standard scooters and two are chrome scooters. Will the breakeven point of total scooters increase or decrease? Why? (Calculation not required.)Question 21 Fox Company has just received an unexpected order from a customer for 1,000 units of a new product. The product will have total variable costs of $15.00 per unit. Fox Company will have to rent a machine for $10,000, pay overtime amounting to $5,000 to a supervisor to handle this order, and fixed packaging and shipping costs of $2,000 for this order. The minimum (floor) price per unit that Fox Company should charge for this order is: Select one: a. $15 b. $30 c. $32 d. $25