signment i JART manufactures and sells underwater markers. Its contribution margin income statement follows. Contribution Margin Income Statement Per Unit $ 6.00 For Year Ended December 31 Sales (400,000 units) Variable costs Direct materials. Direct labor Variable overhead Contribution margin Fixed costs Fixed overhead Fixed general and administrative Income 1.44 0.36 0.60 3.60 0.20 0.15 $ 3.25 Annual Total $ 2,400,000 Required: 1. Compute income from the special offer. 2. Should the company accept or reject the special offer? Required 1 Required 2 576,000 144,000 240,000 1,440,000 A potential customer offers to buy 50,000 units for $3.20 each. These sales would not affect the company's sales through its normal channels. Details about the special offer follow. 80,000 60,000 $ 1,300,000 Direct materials cost per unit and variable overhead cost per unit would not change. • Direct labor cost per unit would be $0.54 because the offer would require overtime pay. • Accepting the offer would require incremental fixed general and administrative costs of $5,000. • Accepting the offer would require no incremental fixed overhead costs. Saved Complete this question by entering your answers in the tabs below. Per Unit Compute income from the special offer. (Round your "Per Unit" answers to 2 decimal places.) Special Offer Analysis Prev Total 1 of 1 Next >
signment i JART manufactures and sells underwater markers. Its contribution margin income statement follows. Contribution Margin Income Statement Per Unit $ 6.00 For Year Ended December 31 Sales (400,000 units) Variable costs Direct materials. Direct labor Variable overhead Contribution margin Fixed costs Fixed overhead Fixed general and administrative Income 1.44 0.36 0.60 3.60 0.20 0.15 $ 3.25 Annual Total $ 2,400,000 Required: 1. Compute income from the special offer. 2. Should the company accept or reject the special offer? Required 1 Required 2 576,000 144,000 240,000 1,440,000 A potential customer offers to buy 50,000 units for $3.20 each. These sales would not affect the company's sales through its normal channels. Details about the special offer follow. 80,000 60,000 $ 1,300,000 Direct materials cost per unit and variable overhead cost per unit would not change. • Direct labor cost per unit would be $0.54 because the offer would require overtime pay. • Accepting the offer would require incremental fixed general and administrative costs of $5,000. • Accepting the offer would require no incremental fixed overhead costs. Saved Complete this question by entering your answers in the tabs below. Per Unit Compute income from the special offer. (Round your "Per Unit" answers to 2 decimal places.) Special Offer Analysis Prev Total 1 of 1 Next >
Chapter5: Process Costing
Section: Chapter Questions
Problem 1PB: The following product costs are available for Stellis Company on the production of erasers: direct...
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