Question

# Rooney Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine,...

Ans:

a.

Order Units: 8,000

Price per unit: \$5.40

Order Value: \$43,200

Relevant cost of production:

Material per unit: \$2

Labor cost per unit: \$1

Shipping, handling: \$0.29

Total per unit cost: \$3.39

Cost for 8,000 units: \$27,120.

So yes, rooney should accept the special order to increase reveune by \$16,080.\

b-1.

Cost to make or buy for 36,000 units:

 Make Buy Material @\$2 per unit 72,000 Labor cost @\$1 per unit 36,000 Manufacturing overhead @\$0.10 per unit 3,600 Shipping and handling @0.29 per unit 10,440 Sales commission @\$2 per unit (Will continue to occur even if we buy from external source) 72,000 72,000 Buying cost @4.5 per unit \$162,000 Fixed Costs \$180,000 \$180,000 Total Cost \$374,040 \$414,000

b-2.

Rooney should not buy and make calculator on their own to save costs.

b-3.

No even if the sales went to 73,000 units rooney should not go for buying option as relevant cost of making is \$3.39 per unit in comparision to offered of \$4.50 per unit. Sales commission will continue to occur in both cases so irrelevant for decision making.

c.

No rooney should not stop operations as rooney's fixed cost is \$180,000 per year which will continue to occur even if no opertions are their. So if operations were stopped their will be a increase in loss of \$129,960 (\$180,000-\$50040).

#### Earn Coins

Coins can be redeemed for fabulous gifts.

Similar Homework Help Questions
• ### Jordan Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine,...

Jordan Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an inexpensive calculator. The company's chief accountant recently prepared the following income statement showing annual revenues and expenses associated with the segment's operating activities. The relevant range for the production and sale of the calculators is between 37,000 and 71,000 units per year. \$ 418,000 Revenue (38,000 units * \$11.00) Unit-level variable costs Materials cost (38,000 × \$3.00) Labor cost (38,000 \$2.00) Manufacturing overhead...

• ### Gibson Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine,...

Gibson Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an inexpensive calculator. The company's chief accountant recenty prepared the following income statement showing annual revenues and expenses associated with the segment's operating activites. The relevant range for the production and sale of the calculators is between 36.000 and 70.000 units per year. \$296,000 Revenue (37,000 units x \$8) Unit-level variable costs Materials coat (37,000 \$2) Labor cost (37,000 \$1) Manufacturing overhead (37.000 x...

• ### Jordan Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine,...

Jordan Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an inexpensive calculator. The company's chief accountant recently prepared the following income statement showing annual revenues and expenses associated with the segment's operating activities. The relevant range for the production and sale of the calculators is between 37,000 and 71,000 units per year. \$ 418,000 Revenue (38,000 units * \$11.00) Unit-level variable costs Materials cost (38,000 * \$3.00) Labor cost (38,000 * \$2.00) Manufacturing...

• ### Benson Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine,...

Benson Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an inexpensive calculator. The company's chief accountant recently prepared the following income statement showing annual revenues and expenses associated with the segment's operating activities. The relevant range for the production and sale of the calculators is between 35,000 and 67,000 units per year. \$ 342,000 Revenue (38,000 units x \$9.00) Unit-level variable costs Materials cost (38,000 x \$3.00) Labor cost (38,000 x \$1.00) Manufacturing...

• ### Fanning Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine,...

Fanning Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an inexpensive calculator. The company's chief accountant recently prepared the following income statement showing annual revenues and expenses associated with the segment's operating activities. The relevant range for the production and sale of the calculators is between 33,000 and 69,000 units per year. Revenue (37,000 units \$10) Unit-level variable costs \$370,000 Materials cost (37,000 \$2) Labor cost (37,000 \$2) Manufacturing overhead (37,000 \$0.30) Shipping...

• ### Bain Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine,...

Bain Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an inexpensive calculator. The company’s chief accountant recently prepared the following income statement showing annual revenues and expenses associated with the segment’s operating activities. The relevant range for the production and sale of the calculators is between 30,000 and 60,000 units per year. Revenue (40,000 units × \$10.80) \$ 432,000 Unit-level variable costs Materials cost (40,000 × \$2.70) (108,000 ) Labor cost (40,000 ×...

• ### Campbell Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machin...

Campbell Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an inexpensive calculator. The company’s chief accountant recently prepared the following income statement showing annual revenues and expenses associated with the segment’s operating activities. The relevant range for the production and sale of the calculators is between 35,000 and 68,000 units per year. Revenue (37,000 units × \$9.00) \$ 333,000 Unit-level variable costs Materials cost (37,000 × \$2.00) (74,000 ) Labor cost (37,000 ×...

• ### Fanning Corporation makes and sets state-of-the-art electronics products. One of its segments produces The Math Machine,...

Fanning Corporation makes and sets state-of-the-art electronics products. One of its segments produces The Math Machine, an inexpensive calculator. The company's chief accountant recently prepared the following income statement showing annual revenues and expenses associated with the segment's operating activities. The relevant range for the production and sale of the calculators is between 33.000 and 69,000 units per year 57. Revenue (7,units \$10. ) Unit-level wale costs Materials cost (37,000 \$2.00) Labor cost ( 1 0 ) Manufacturing overhead (7....

• ### Problem 3 Bain Corporation makes and sells state-of-the art electronics products. One of its segments produces...

Problem 3 Bain Corporation makes and sells state-of-the art electronics products. One of its segments produces The Math Machine, an inexpensive calculator. The company's chief accountant recently prepared the following income statement showing annual revenues and expenses associated with the segment's operating activities. The relevant range for the production and sale of the calculators is between 30,000 and 60,000 units per year. Revenue (40.000 units x \$10.80) \$432,000 Unit-level variable costs: Materials cost (40,000 x \$2.70 (108.000 Labor cost (40,000...

• ### NEED HELP WITH ALL PARTS PLS Vernon Corporation makes and sells state-of-the-art electronics products. One of...

NEED HELP WITH ALL PARTS PLS Vernon Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an Inexpensive calculator. The company's chief accountant recently prepared the following Income statement showing annual revenues and expenses associated with the segment's operating activities. The relevant range for the production and sale of the calculators is between 33,000 and 71,000 units per year. \$423,00 Revenue (47,eee units x \$9) Unit-level variable costs Materials cost (47,080 x \$2) Labor...