Homework Help is Here – Start Your Trial Now!
Business
Accounting
Required information Dwight Furniture makes desks specially designed for small spaces, such as studio apartments and extended-stay hotels. Each desk sells for $167 (without chair). The cost of each desk follows: Materials Labor Variable overhead Fixed overhead ($256,000 per month, 16,000 units per month) Total costs per unit $ 55 60 6 16 $ 137 The local university is building a new dorm and asked Dwight for a special price of $128 for an order of 900 desks. Dwight's can fill the order using existing capacity without affecting total fixed costs for the month. However, because the sale would be to a state agency, Dwight would have to file specified compliance documents with the state purchasing office. Dwight's manager estimates that the time and expenses incurred by this filing will amount to $9,100 and is independent of the number of desks ordered. Dwight's manager is unsure whether to accept this order and wants your advice. Required: a. Prepare a schedule to show the impact of providing the special order of 900 desks on Dwight's profits in addition to the regular production and sales of 16,000 desks per month. b. Based solely on the data given, what is the lowest price per unit at which the desks could be sold to the university without reducing Dwight's profits? Complete this question by entering your answers in the tabs below. Required Required A B Based solely on the data given, what is the lowest price per unit at which the desks could be sold to the university without reducing Dwight's profits? Lowest price per desk < Required A Required B >

Required information Dwight Furniture makes desks specially designed for small spaces, such as studio apartments and extended-stay hotels. Each desk sells for $167 (without chair). The cost of each desk follows: Materials Labor Variable overhead Fixed overhead ($256,000 per month, 16,000 units per month) Total costs per unit $ 55 60 6 16 $ 137 The local university is building a new dorm and asked Dwight for a special price of $128 for an order of 900 desks. Dwight's can fill the order using existing capacity without affecting total fixed costs for the month. However, because the sale would be to a state agency, Dwight would have to file specified compliance documents with the state purchasing office. Dwight's manager estimates that the time and expenses incurred by this filing will amount to $9,100 and is independent of the number of desks ordered. Dwight's manager is unsure whether to accept this order and wants your advice. Required: a. Prepare a schedule to show the impact of providing the special order of 900 desks on Dwight's profits in addition to the regular production and sales of 16,000 desks per month. b. Based solely on the data given, what is the lowest price per unit at which the desks could be sold to the university without reducing Dwight's profits? Complete this question by entering your answers in the tabs below. Required Required A B Based solely on the data given, what is the lowest price per unit at which the desks could be sold to the university without reducing Dwight's profits? Lowest price per desk < Required A Required B >

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter8: Standard Costs And Variances
Section: Chapter Questions
Problem 4EA: Use the information provided to create a standard cost card for production of one glove box switch....
See similar textbooks
icon
Related questions
Question
Required information Dwight Furniture makes desks specially designed for small spaces, such as studio apartments and extended-stay hotels. Each desk sells for $167 (without chair). The cost of each desk follows: Materials Labor Variable overhead Fixed overhead ($256,000 per month, 16,000 units per month) Total costs per unit $ 55 60 6 16 $137 The local university is building a new dorm and asked Dwight for a special price of $128 for an order of 900 desks. Dwight's can fill the order using existing capacity without affecting total fixed costs for the month. However, because the sale would be to a state agency, Dwight would have to file specified compliance documents with the state purchasing office. Dwight's manager estimates that the time and expenses incurred by this filing will amount to $9,100 and is independent of the number of desks ordered. Dwight's manager is unsure whether to accept this order and wants your advice. Required: a. Prepare a schedule to show the impact of providing the special order of 900 desks on Dwight's profits in addition to the regular production and sales of 16,000 desks per month. b. Based solely on the data given, what is the lowest price per unit at which the desks could be sold to the university without reducing Dwight's profits? Complete this question by entering your answers in the tabs below. Required Required A B Based solely on the data given, what is the lowest price per unit at which the desks could be sold to the university without reducing Dwight's profits? Lowest price per desk < Required A Required B >
Transcribed Image Text:Required information Dwight Furniture makes desks specially designed for small spaces, such as studio apartments and extended-stay hotels. Each desk sells for $167 (without chair). The cost of each desk follows: Materials Labor Variable overhead Fixed overhead ($256,000 per month, 16,000 units per month) Total costs per unit $ 55 60 6 16 $137 The local university is building a new dorm and asked Dwight for a special price of $128 for an order of 900 desks. Dwight's can fill the order using existing capacity without affecting total fixed costs for the month. However, because the sale would be to a state agency, Dwight would have to file specified compliance documents with the state purchasing office. Dwight's manager estimates that the time and expenses incurred by this filing will amount to $9,100 and is independent of the number of desks ordered. Dwight's manager is unsure whether to accept this order and wants your advice. Required: a. Prepare a schedule to show the impact of providing the special order of 900 desks on Dwight's profits in addition to the regular production and sales of 16,000 desks per month. b. Based solely on the data given, what is the lowest price per unit at which the desks could be sold to the university without reducing Dwight's profits? Complete this question by entering your answers in the tabs below. Required Required A B Based solely on the data given, what is the lowest price per unit at which the desks could be sold to the university without reducing Dwight's profits? Lowest price per desk < Required A Required B >
Expert Solution
steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Cost control
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Entrepreneurial Finance
Entrepreneurial Finance
Finance
ISBN:
9781337635653
Author:
Leach
Publisher:
Cengage
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
SEE MORE TEXTBOOKS