Sequoia Paper Products, Inc., manufactures boxed stationery for sale to specialty shops. Currently, the company is operating at 80 percent of capacity. A chain of drugstores has offered to buy 29,000 boxes of Sequoia’s blue-bordered thank-you notes as long as the box can be customized with the drugstore chain’s logo. While the normal selling price is $5.40 per box, the chain has offered just $2.90 per box. Sequoia can accommodate the special order without affecting current sales. Unit cost information for a box of thank-you notes follows: Direct materials $1.75 Direct labor 0.34 Variable overhead 0.08 Fixed overhead 1.90   Total cost per box $4.07 Fixed overhead is $444,000 per year and will not be affected by the special order. Normally, there is a commission of 5 percent of price; this will not be paid on the special order since the drugstore chain is dealing directly with the company. The special order will require additional fixed costs of $15,900 for the design and setup of the machinery to stamp the drugstore chain’s logo on each box. Required: 1. The operating income would increase by?

Numble Inc., manufactures boxed stationery. Currently, the company is operating at 80 percent of capacity. A chain of hospitals has offered to buy 24,000 boxes of Numble’s’ pink-bordered thank-you notes as long as the box can be customized with the hospital chain’s logo. While the normal selling price is $5 .00 per box, the chain has offered just $3.40 per box. Numble can accommodate the Special order Without affecting current sales. Unit cost information for a box of thank-you notes follows:       Required: 1. What are the alternatives for Numble Company? 2. Assume that none of the fixed cost is avoidable. List the relevant cost(s) of internal production and of external purchase. 3. Which alternative is more cost-effective and by how much?  4. Will Numble still accept the offer if the price offered is $2.50? Why or why not? Explain.

Crane, Inc., sells two types of water pitchers, plastic and glass. Plastic pitchers cost the company $30 and are sold for $40. Glass pitchers cost $26 and are sold for $47. All other costs are fixed at $280,800 per year. Current sales plans call for 14,000 plastic pitchers and 28,000 glass pitchers to be sold in the coming year. Crane, Inc., has just received a sales catalog from a new supplier that is offering plastic pitchers for $28. What would be the new contribution margin per unit if managers switched to the new supplier?    What would be the new breakeven point if managers switched to the new supplier? (Use contribution margin per unit to calculate breakeven units. Round answers to 0 decimal places, e.g. 25,000.)

Zozan Corp. manufactures Hydrogen engines automobiles. Recently 450 new orders placed by customers requesting credit. The variable cost is $35,000 per unit, and the credit price is $43,000 each. Credit is extended for one period, and based on historical experience, payments for 20% of the orders are never collected. The required return is 4% per period. Assuming a repeat customer, should it be filled by the firm? The customer will not buy if credit is not extended

The Shirt Works sells a large variety of tee shirts and sweatshirts Steve Hooper, the owner, is thinking of expanding his sales by hiring high school students, on a commission basis, to sell sweatshirts bearing the name and mascot of the local high school These sweatshirts would have to be ordered from the manufacturer six weeks in advance, and they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $20.00 each with a minimum order of 220 sweatshirts. Any additional sweatshirts would have to be ordered in increments of 220 Since Hooper's plan would not require any additional facilities, the only costs associated with the project would be the costs of the sweatshirts and the costs of the sales commissions. The selling price of the sweatshirts would be $40.00 each. Hooper would pay the students a commission of $600 for each shirt sold Required: 1. What level of unit sales and dollar sales is needed to attain a target profit of $12.320? 2.…

Wave Crest Cosmetics produces cosmetic products for 11 major buyers. One customer accounts for ½ of the sales, the other 10 customers account for the remaining sales. The 10 smaller customers place orders of about equal size. The large customer purchases 1,000,000 units per year by placing 3 orders per year, and the 10 smaller customers order 1,000,000 units in total by placing 500 orders per year. Order filling costs total $1,056,300 per year. How much would be assigned to the large customer as ordering costs using activity-based customer costs

A vendor is running a promotion whereby a consumer who purchases three boxes of golf balls at P20 per box in a single transaction receives an offer for one free box of golf balls if the customer fills out a request form and mails it to the vendor before a set expiration date (a mail-in rebate). The vendor estimates, based on recent experience with similar promotions, that 80% of the customers will complete the mail-in rebate required to receive the free box of golf balls. How much of the transaction price is allocated to the mail-in rebate?

Teddy Dog Food Incorporated (TDFI) currently makes and sells one type and size of dog food, a 16 ounce bag of all-natural freeze-dried chicken. TDFI sells each bag of food for $10. The Variable Expense per bag of food is $6. Fixed Expenses per month total $300.   If TDFI sells three extra bags of dog food, by how much does TDFI's overall profit increase? Omit the dollar sign in your answer.

Assume Costco wants to compete with large manufacturers of golf bags. Costco begins selling a new model of golf bag in its stores for $150. The bag comes with a coupon that customers may mail in to receive a free box of one dozen Kirkland (Costco's brand) golf balls. Each dozen golf balls cost Costco $9.50 to produce and $1.50 to mail to the customer. Kirkland estimates that 40% of the customers who buy a golf bag will mail in the coupon for the free golf balls. During the first quarter of 2020 Costco sold 12,000 golf bags. During that time, 1,000 customers mailed in their coupons and Costco sent them their golf balls. What is the rebate expense and liability, respectively, shown on Costco's financial statements at the end of the first quarter of 2020?

The Cloth Bonanza sells fabrics to a wide range of industrial and consumer users. One of the products it carries is denim​ cloth, used in the manufacture of jeans and carrying bags. The supplier for the denim cloth pays all incoming freight. No incoming inspection of the denim is necessary because the supplier has a track record of delivering​ high-quality merchandise. The purchasing officer of the Cloth Banaza has collected the following​ information:                                                                      Annual demand for denim cloth 29,250 yards Ordering cost per purchase order $195 Carrying cost per year 20% of purchase costs Safety-stock requirements None Cost of denim cloth $15 per yard   The purchasing lead time is 2 weeks. The Cloth Banaza is open 250 days a year ​(50 weeks for 5 days a​ week).                                                                                          1. Calculate the EOQ for denim cloth.…