Use the following information for the Quick Study below. (Algo)[The following information applies to the questions displayed below.]Helix Company is approached by a new customer to provide 1,800 units of its product at a special price of $9 per unit. Thenormal selling price of the product is $11 per unit. Helix is operating at 80% of its capacity of 11,500 units. No incrementalfixed overhead will be incurred because of this order. Also, there will be no incremental fixed general and administrativecosts because of this order.QS 23-2 (Algo) Special offer LO P7a. Special selling price of $9.00 per unitb. Direct materials of $2.00 per unitc. Direct labor of $3.00 per unitd. Variable overhead of $2.50 per unite. Fixed overhead of $.75 per unitf. Fixed general and administrative costs of $.60 per unitBased on income, should Helix accept this new customer order at the special price?SalesVariable costsSPECIAL OFFER ANALYSISDirect materialsDirect laborVariable overheadContribution marginFixed costsFixed overheadFixed general and administrative$4Per Unit11.00 $(2.00)(3.00)(2.50)3.50(0.75)(0.60)215Total101,200(18,400)(27,600)(23,000)32,200(6,900)(5,520)10 700

Special offer analysis Per unit Total Sales $9 $16,200 Variable costs Direct…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Helix Company has been approached by a new customer to provide 3,200 units of its regular product at a special price of $8 per unit. The regular selling price of the product is $10 per unit. Helix is operating at 75% of its capacity of 11,200 units. Identify whether the following costs are relevant to Helix’s decision as to whether to accept the order at the special selling price. No additional fixed manufacturing overhead will be incurred because of this order. The only additional selling expense on this order will be a $0.50 per unit shipping cost. There will be no additional administrative expenses because of this order. Identify whether the cost is relevant or irrelevant to accepting this order.
! Required information [The following information applies to the questions displayed below.] Helix Company is approached by a new customer to provide 2,050 units of its product at a special price of $8 per unit. The normal selling price of the product is $10 per unit. Helix is operating at 75% of its capacity of 10,200 units. No incremental fixed overhead will be incurred because of this order. Also, there will be no incremental fixed general and administrative costs because of this order. Identify whether each of the following is relevant or not relevant to accepting this order. Item a. Special selling price of $8.00 per unit b. Direct materials of $1.00 per unit c. Direct labor of $2.00 per unit d. Variable overhead of $1.50 per unit e. Fixed overhead of $0.70 per unit f. Fixed general and administrative costs of $0.60 per unit
Diskmar has received a special order for 2,000 units of its product at a special price of $75. The product normally sells for $100 and has the following manufacturing costs:Direct material costs are $30; Direct labor costs are $20; and Variable Overhead costs are $15. Assume that Diskmar has sufficient capacity to fill the order without harming normal production and sales. a. If Diskmar accepts the order, what effect will the order have on the company's short-term profit? b. What minimum price should Diskmar charge to achieve a $25,000 incremental profit? c. Now assume Diskmar is currently operating at full capacity and cannot fill the order without harming normal production and sales. If Diskmar accepts the order, what effect will the order have on the company's short-term profit?
Helix Company has been approached by a new customer to provide 2,000 units of its regular product at a special price of $6 per unit. The regular selling price of the product is $8 per unit. Helix is operating at 75% of its capacity of 10,000 units. Identify whether the following costs are relevant to Helix’s decision as to whether to accept the order at the special selling price. No additional fixed manufacturing overhead will be incurred because of this order. The only additional selling expense on this order will be a $0.50 per unit shipping cost. There will be no additional administrative expenses because of this order. Place an X in the appropriate column to identify whether the cost is relevant or irrelevant to accepting this order. Item Relevant Not Relevant a. Selling price of $6.00 per unit b. Direct materials cost of $1.00 per unit c. Direct labor of $2.00 per unit d. Variable manufacturing overhead of $1.50 per unit e. Fixed manufacturing overhead of $0.75 per unit f. Regular…
How do i calculate the net income for a special order? For example: Blowing Sand Company has just received a one-time offer to purchase 10,200 units of its Gusty model for a price of $34 each. The Gusty model costs $36 to produce ($29 in variable costs and $7 of fixed overhead). Because the offer came during a slow production month, Blowing Sand has enough excess capacity to accept the order.
A customer has requested that Stanford Corporation fill a special order for 9,000 units of product S47 for $20.50 a unit. While the product would be modified slightly for the special order, product S47's normal unit product cost is $14.40: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost O $(9,900) Assume that direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product S47 that would increase the variable costs by $5.00 per unit and that would require an investment of $36,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. The annual financial advantage (disadvantage) for the company as a result of accepting this special order should be: O $4,500 S O $54,900 O…
The Carlo Company has received a special order for 600 units of product B for P12 a unit. It usually sells for P19 a unit with a cost of P15 a unit inclusive of P1.5 a unit as sales commission that will not be paid on this order. The cost also includes P6 in manufacturing overhead, 2/3 of which is a common overhead allocation. Assuming the excess capacity is available and this order requires a mold that costs P150. What is the increase(decrease) in profit for this special order?
Luca Inc. has received a special order for 2,000 units of its product at a special price of $75. The product normally sells for $100 and has the following manufacturing costs: Assume that Luca Inc. has sufficient capacity to fill the order without harming normal production and sales. If Luca Inc. accepts the order, what effect will the order have on the company's short-term profit? Per Unit Direct materials $30 Direct labor $20 Variable manufacturing overhead $15 Fixed manufacturing overhead $25 a. $50,000 decrease b. $30,000 increase c. $20,000 increase d. $30,000 decrease
Alpha currently makes a subassembly for its main product. The costs per unit are as follows: Direct materials $ 45.00 Direct labor 35.00 Variable overhead Fixed overhead 30.00 Total $143.00 33.00 Vendor has contacted Alpha with an offer to sell 5,000 of the subassemblies for $135.00 each. Alpha will eliminate $85,000 of fixed overhead if it accepts the proposal. 25) Which option, make or buy, gives Alpha the higher operating income? By how much?
A customer has asked Lalka Corporation to supply 4,500 units of product H60, with some modifications, for $42.70 each. The normal selling price of this product is $49.35 each. The normal unit product cost of product H60 is computed as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit product cost $ 16.20 2.80 10.00 9,40 $ 38.40 Direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like some modifications made to product H60 that would increase the variable costs by $5.30 per unit and that would require a one-time investment of $24,750 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. Required: Determine the financial advantage or disadvantage of accepting the special order.
to.mheducation.com/ext/map/index Maps News Translate omework i Helix Company is approached by a new customer to provide 1,900 units of its product at a special price of $8 per unit. The normal selling price of the product is $10 per unit. Helix is operating at 80% of its capacity of 12,000 units. No incremental fixed overhead will be incurred because of this order. Also, there will be no incremental fixed general and administrative costs because of this order. Sales Variable costs M SmartBook 2.0 M SmartBook 2.0 a. Special selling price of $8.00 per unit b. Direct materials of $2.00 per unit c. Direct labor of $3.00 per unit d. Variable overhead of $2.50 per unit e. Fixed overhead of $.70 per unit f. Fixed general and administrative costs of $.60 per unit Based on income, should Helix accept this new customer order at the special price? Direct materials Direct labor Variable overhead Contribution margin Fixed costs SPECIAL OFFER ANALYSIS 2 Fixed overhead Fixed general and…
A customer has requested a special order of ABC Co's primary product and has offered to pay $30 per unit. While the product would be modified slightly for the special order, the product's normal information is provided below Sales price per unit Direct materials per unit Direct labor per unit $25.50 Total Fixed Costs $6.20 $2 Variable manufacturing overhead per unit $ 4.40 $1,150,000 The customer would like modifications made to each product that would increase the variable costs by $2.20 per unit and that would require an investment of $24,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. How large would the special order have to be in units in order for ABC Co to break even on the special order?

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