Connect Access Card For Fundamentals Of Cost Accounting
6th Edition
ISBN: 9781260708738
Author: William N. Lanen Professor, Shannon Anderson Associate Professor, Michael W Maher
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 4, Problem 36E
a.
To determine
Calculate the impact on operating profit because of the special order.
b.
To determine
Decide whether Ms. M should accept the order or not.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Shiigi Urban Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for May is to be
based on 3,360 meals. The diner's director has provided the following cost data to use in the budget: groceries, $4.40 per meal;
kitchen operations, $4,660 per month plus $2.75 per meal; administrative expenses, $3,860 per month plus $1.00 per meal; and
fundraising expenses, $1,760 per month.
Required:
Prepare the diner's budget for the month of May. The budget will only contain the costs listed above; no revenues will be on the
budget.
Shiigl Urban Diner
Planning Budget
For the Month Ended May 31
Budgeted meals
Groceries
Kitchen operations
Administrative expenses
Fundraising expenses
Total expense
3,360
Maria's Food Service provides meals that nonprofit organizations distribute to handicapped and elderly people. The following is her forecasted income statement for April, when she expects to produce and sell 2,200 meals:
Amount
Per Unit
Sales revenue
$
11,440
$
5.20
Costs of meals produced
9,020
4.10
Gross profit
$
2,420
$
1.10
Administrative costs
1,100
0.50
Operating profit
$
1,320
$
0.60
Fixed costs included in this income statement are $3,124 for meal production and $440 for administrative costs. Maria has received a special request from an organization sponsoring a picnic to raise funds for the Special Olympics. This organization is willing to pay $3.10 per meal for 300 meals on April 10. Maria has sufficient idle capacity to fill this special order. These meals will incur all of the variable costs of meals produced, but variable administrative costs and total fixed costs will not be affected.
Required:
a. What…
Maria's Food Service provides meals that nonprofit organizations distribute to handicapped and elderly people. The following is her forecasted income statement for April, when she expects to produce and sell 4, 000 meals:
Amount Per Unit
Sales revenue $ 28,000 $7.00
costs of meals produced 20,000 5.00
Gross Profit $ 8,000 $ 2.00
Administrative costs 3,200 .08
Operating profit $ 4,800 $ 1.20
Fixed costs included in this income statement are $6,400 for meal production and $800 for administrative costs. Maria has received a special request from an organization sponsoring a picnic to raise funds for the Special Olympics. This organization is willing to pay $4.00 per meal for 300 meals on April…
Chapter 4 Solutions
Connect Access Card For Fundamentals Of Cost Accounting
Ch. 4 - Fixed costs are often defined as fixed over the...Ch. 4 - What is the difference between a sunk cost and a...Ch. 4 - Are sunk costs ever differential costs? Explain.Ch. 4 - What is the difference between short-run and...Ch. 4 - What costs are included in the full cost of a...Ch. 4 - What costs are included in the full cost of a...Ch. 4 - What costs should be considered for a special...Ch. 4 - What are life-cycle product costing and pricing?Ch. 4 - Prob. 9RQCh. 4 - What do the terms target cost and target price...
Ch. 4 - What is predatory pricing? Why is it illegal in...Ch. 4 - What is dumping? What role would a cost accountant...Ch. 4 - What is price discrimination? How could a cost...Ch. 4 - If we want to maximize profit, why do we use unit...Ch. 4 - A company has learned that a particular input...Ch. 4 - Why are production constraints important in...Ch. 4 - What are some nonfinancial factors in decisions to...Ch. 4 - Prob. 18RQCh. 4 - Prob. 19CADQCh. 4 - Prob. 20CADQCh. 4 - As a marketing manager for an airline, would you...Ch. 4 - Prob. 22CADQCh. 4 - You buy an airline ticket to New York City to see...Ch. 4 - Consider the Business Application item,...Ch. 4 - One of your acquaintances notes, This whole...Ch. 4 - A manager in your organization just received a...Ch. 4 - Many airline frequent-flier programs upgrade elite...Ch. 4 - Consider the opportunity costs you identified in...Ch. 4 - Prob. 29CADQCh. 4 - Prob. 30CADQCh. 4 - Prob. 31CADQCh. 4 - Prob. 32CADQCh. 4 - Prob. 33CADQCh. 4 - Prob. 34CADQCh. 4 - Prob. 35CADQCh. 4 - Prob. 36ECh. 4 - Prob. 37ECh. 4 - Pricing Decisions Assume that MTA Sandwiches sells...Ch. 4 - Pricing Decisions Rutkey Collectibles is a small...Ch. 4 - Prob. 40ECh. 4 - Special Order Fairmount Travel Gear produces...Ch. 4 - Target Costing and Pricing Sids Skins makes a...Ch. 4 - Target Costing and Pricing Domingo Corporation...Ch. 4 - Target Costing and Purchasing Decisions Mira Mesa...Ch. 4 - Target Costing Kearney, Inc., makes kitchen tools....Ch. 4 - Make-or-Buy Decisions Mobility Partners makes...Ch. 4 - Make-or-Buy Decisions Mels Meals 2 Go purchases...Ch. 4 - Prob. 49ECh. 4 - Dropping Product Lines Freeflight Airlines is...Ch. 4 - Pappy’s Toys makes two models of a metal...Ch. 4 - Christine’s Chronographs makes two models of a...Ch. 4 - Unter Components manufactures low-cost navigation...Ch. 4 - Special Orders Sherene Nili manages a company that...Ch. 4 - Prob. 55PCh. 4 - M. Anthony, LLP, produces music in a studio in...Ch. 4 - Davis Kitchen Supply produces stoves for...Ch. 4 - Make or Buy King City Specialty Bikes (KCSB)...Ch. 4 - Prob. 59PCh. 4 - Prob. 60PCh. 4 - Prob. 61PCh. 4 - Prob. 62PCh. 4 - Prob. 63PCh. 4 - Agnew Manufacturing produces and sells three...Ch. 4 - Prob. 65PCh. 4 - Power Music owns five music stores, where it sells...Ch. 4 - You have been asked to assist the management of...Ch. 4 - Prob. 68PCh. 4 - Prob. 69PCh. 4 - Prob. 70PCh. 4 - Prob. 71PCh. 4 - Prob. 72PCh. 4 - Slavin Corporation manufactures two products,...Ch. 4 - Prob. 74PCh. 4 - Prob. 75P
Knowledge Booster
Similar questions
- Marchant Urban Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for June was based on 2,200 meals, but the diner actually served 1,800 meals. The diner's director has provided the following cost data to use in the budget: groceries, $3.85 per meal; kitchen operations, $4,300 per month plus $1.70 per meal; administrative expenses, $2,000 per month plus $0.45 per meal; and fundraising expenses, $1,100 per month. Required:Prepare the diner's flexible budget for the actual number of meals served in June. What is the amount of total expenses under the flexible budget?arrow_forwardRuby Krisher Diner is a charity supported by donations that provides free meals to the homeless. The diner's budget for May was based on 3,900 meals, but the diner actually served 4,100 meals. The diner's director has provided the following cost data to use in the budget groceries, $4.85 per meal; kitchen operations, $5,900 per month plus $1.85 per meal, administrative expenses, $4,900 per month plus $0.50 per meal; and fundraising expenses, $2,900 per month. Required: Prepare a report showing the activity variances for each of the expenses and for total expenses for May. Note: Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (l.e., zero variance). Meals Groceries Kitchen operations Administrative expenses Fundraising expenses Total expense Rub Krisher Diner Activity Variances For the Month Ended May 31 Flexible Budget Planning Budget 4,100 3,900 Activity Variancesarrow_forwardA nonprofit decides to provide free food for the homeless in Thanksgiving holidays. The manager wants to write a proposal to raise money from their donors. Assume that the project requires a fixed cost of $5,000 for staff and equipment. The variable cost such as utensils and food is $5 per person served. Based on the manager's experience, the manager estimates there will be 200 homeless people to serve. What is the price per person that the manager should put into his/her proposal? a.$5 b.$30 c.$25 d.$5,000arrow_forward
- Good Samaritan Diner is a charity supported by donations that provides free meals to the homeless. The diner's planning budget for May was based on 2,000 meals, but the diner actually served 2,100 meals. The diner's director has provided the following cost data used in the budget: groceries, $4 per meal; kitchen operations, $4,000 per month plus $1.75 per meal; administrative expenses, $3,100 per month plus $0.30 per meal; and fundraising expenses, $500 per month. The director has also provided the diner's statement of actual expenses for the month: Actual meals Groceries Kitchen operations Good Samaritan Diner Statement of Expenses For the Month Ended May 31 Administrative expenses Fundraising expenses Total expense 2100 $8,635 7,200 3,656 450 $19,941 Required: Prepare a Flexible Budget Performance Report showing the activity and spending variances for each of the individual expenses and for total expenses for May.arrow_forwardJulianna Abdallah owns and operates FirstCakes, a bakery that creates personalized birthday cakes for a child’s first birthday. The cakes, which sell for $56 and feature an edible picture of the child, are shipped throughout the country. A typical month’s results are as follows: Sales revenue $749,280 Variable expenses 561,960 Contribution margin 187,320 Fixed expenses 133,000 Operating income $ 54,320 How many cakes will Julianna Abdallah have to sell if she wants to earn $171,654 in operating income each month? cakes LINK TO TEXT LINK TO VIDEO Assuming a 30% tax rate, how many cakes will Julianna Abdallah have to sell if she wants to earn $74,284 in net income each month? (Round answer to 0 decimal places, e.g. 5,275.) cakesarrow_forwardAs a fund-raiser, the pep band at Melrose University sells T-shirts fans can wear when attendingthe school’s 12 home basketball games. As the band’s business manager, you must choose amongseveral options for ordering and selling the T-shirts.1. Place a single order in October large enough to last the entire season. The band must pay forthe shirts in full when the order is placed. A 5 percent quantity discount applies to this option.2. Place a series of small orders, as needed, throughout the season. Again, payment in full is duewhen the order is submitted. No discount applies to this option.3. Have band members sell shirts directly to members of the student body. Cash is collectedimmediately as sales are made.4. Sell all of the T-shirts through the university bookstore. The bookstore would receive a6 percent commission on total sales and would remit to the band its share of the proceeds ina lump-sum payment at the end of the season.a. Describe which combination of options would give…arrow_forward
- Oriole Dinner Box Inc. is a catering company that sells meal kits that its customers can take home and quickly prepare. The company sells its meal kits at local grocery stores and has recently begun to offer a monthly subscription service, which delivers meal kits to the customer's home. Single meal kits can be purchased at grocery stores. Approximately 10% of the kits shipped to grocery stores each month are returned unsold and are then discarded. Oriole charges the grocery stores $15 for each meal kit. In December 2024, Oriole began selling three- month subscriptions for $900. Subscriptions are paid in advance and are non-cancellable. Oriole sold 840 subscriptions on December 1,2024, which entitle the subscriber to 15 meal kits each month beginning in December 2024. During December, 4,620 meal kits were sold, on account, to grocery stores and all required subscriber meals were delivered. Grocery stores have 30-day terms of payment with Oriole. (a1) Your answer is correct. Determine…arrow_forwardBecky Shelton, a marketing coordinator for Douglass Enterprises, is in charge of ordering the T-shirts to be sold for the company's annual fund-raising project. The T-shirts are printed with a special Douglass Enterprises logo. In some years, the supply of T-shirts has been insufficient to satisfy the number of sales orders. In other years, T-shirts have been left over. Excess T- shirts are normally donated to some charitable organization. T-shirts cost the company $7 each and are normally sold for $14 each. Ms. Shelton has decided to order 700 shirts. Required a. If the company receives actual sales orders for 625 shirts, what amount of profit will the company earn? What is the cost of waste due to excess inventory? b. If the company receives actual sales orders for 740 shirts, what amount of profit will the company earn? What amount of opportunity cost will the company incur? a. Profit a. Waste due to excess inventory b. Profit b. Opportunity costarrow_forwardBecky Shelton, a marketing coordinator for Douglass Enterprises, is in charge of ordering the T-shirts to be sold for the company's annual fund-raising project. The T-shirts are printed with a special Douglass Enterprises logo. In some years, the supply of T-shirts has been Insufficient to satisfy the number of sales orders. In other years, T-shirts have been left over. Excess T-shirts are normally donated to some charitable organization. T-shirts cost the company $7 each and are normally sold for $14 each. Ms. Shelton has decided to order 870 shirts. Required a. If the company receives actual sales orders for 795 shirts, what amount of profit will the company earn? What is the cost of waste due to excess inventory? b. If the company receives actual sales orders for 910 shirts, what amount of profit will the company earn? What amount of opportunity cost will the company Incur? a. Profit a. Waste due to excess inventory b. Profit b. Opportunity costarrow_forward
- Fred Flingstone operates a French Fries stand at the local flee market that operates for 8 weekends through the summer. The market vendor fee is $50 per weekend, his vendor insurance is $376 for the summer and he has committed to paying a helper $150 per weekend. His variable costs are $1.58 per French Fries (This includes the cost of napkins, ketchup and salt). He plans to sell the fries for $3.50 each and he knows from experience that he can make a maximum of 200 fries each weekend. a) How many fries does he have to sell per week to break even? b) On one weekend he gets sick and cannot get to the market? What is his net loss for that weekend? c) Another french fries vendor at the market sells fries for $3.10 each. How many fries would Fred have to sell in summer at this price to break even assuming none of his costs change? d) How much would he have to change the variable costs (assuming original fixed costs) to maintain his original break even point if he sold fries at $3.00?arrow_forwardMary Smith owns and operates BlossomCakes, a bakery that creates personalized birthday cakes for a child's first birthday. The cakes, which sell for $40 and feature an edible picture of the child, are shipped throughout the country. A typical month's results are as follows: Sales revenue $760,000 Variable expenses 570,000 Contribution margin 190,000 Fixed expenses 105,000 Operating income $85,000arrow_forwardJen and Barry's ice cream shop charges $1.55 for a cone. Variable expenses are $0.25 per cone, and fixed costs total $2,200 per month. A Valentine's Day promotion is being planned for the second week of February. During this week, a person buying a cone at the regular price would receive a free cone for a friend. It is estimated that 725 additional cones would be sold and that 925 cones would be given away. Advertising costs for the promotion would be $140. Required: a. Calculate the effect of the promotion on operating income for the second week of February. b. Do you think the promotion should occur? Complete this question by entering your answers in the tabs below. Required A Required B Calculate the effect of the promotion on operating income for the second week of February. Note: Do not round intermediate calculation and round your final answer to 2 decimal places. in operating income Netarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
