Solution
Increase | $ 18,750.00 |
Working
financial advantage (disadvantage) of accepting the special order | |
Additional Revenue from offer (15000 x $8) | $ 1,20,000.00 |
Less: Total Additional cost due to acceptance of offer | $ 1,01,250.00 |
Financial Advantage | $ 18,750.00 |
.
Calculation of Additional Cost of Order | ||
Per Unit | Total | |
Direct material | $ 3.10 | $ 46,500.00 |
Direct labor | $ 2.50 | $ 37,500.00 |
Variable manufacturing overheads | $ 1.15 | $ 17,250.00 |
Total Additional cost due to acceptance of order | $ 6.75 | $ 1,01,250.00 |
Special-Order Decision Smooth Move Company manufactures professional paperweights and has been approached by a new customer...
Special-Order Decision Smooth Move Company manufactures professional paperweights and has been approached by a new customer with an offer to purchase 15,000 units at a per-unit price of $9.00. The new customer is geographically separated from Smooth Move's other customers, and existing sales will not be affected. Smooth Move normally produces 88,000 units but plans to produce and sell only 65,000 in the coming year. The normal sales price is $16 per unit. Unit cost information is as follows: Direct...
Smooth Move Company manufactures professional paperweights and has been approached by a new customer with an offer to purchase 15,000 units at a per-unit price of $7.00. The new customer is geographically separated from Smooth Move's other customers, and existing sales will not be affected. Smooth Move normally produces 82,000 units but plans to produce and sell only 65,000 in the coming year. The normal sales price is $12 per unit. Unit cost information is as follows: Direct materials $3.10...
Smooth Move Company manufactures professional paperweights and has been approached by a new customer with an offer to purchase 15,000 units at a per-unit price of $7.00. The new customer is geographically separated from Smooth Move's other customers, and existing sales will not be affected. Smooth Move normally produces 82,000 units but plans to produce and sell only 65,000 in the coming year. The normal sales price is $12 per unit. Unit cost information is as follows: Direct materials $3.10...
Smooth Move Company manufactures professional paperweights and has been approached by a new customer with an offer to purchase 15,000 units at a per-unit price of $7.00. The new customer is geographically separated from Smooth Move's other customers, and existing sales will not be affected. Smooth Move normally produces 82,000 units but plans to produce and sell only 65,000 in the coming year. The normal sales price is $12 per unit. Unit cost information is as follows: Direct materials $3.10...
Smooth Move Company manufactures professional paperweights and has been approached by a new customer with an offer to purchase 15,000 units at a per-unit price of $7.00. The new customer is geographically separated from Smooth Move's other customers, and existing sales will not be affected. Smooth Move normally produces 82,000 units but plans to produce and sell only 65,000 in the coming year. The normal sales price is $12 per unit. Unit cost information is as follows: Direct materials $3.10...
Structuring a Special-Order Problem Harrison Ford Company has been approached by a new customer with an offer to purchase 10,000 units of its model IJ5 at a price of $4.00 each. The new customer is geographically separated from the company's other customers, and existing sales would not be affected. Harrison normally produces 75,000 units of IJ5 per year but only plans to produce and sell 60,000 in the coming year. The normal sales price is $12 per unit. Unit cost...
Structuring a Special-Order Problem Harrison Ford Company has been approached by a new customer with an offer to purchase 10,000 units of its model IJ5 at a price of $5 each. The new customer is geographically separated from the company's other customers, and existing sales would not be affected. Harrison normally produces 75,000 units of IJ5 per year but only plans to produce and sell 60,000 in the coming year. The normal sales price is $12 per unit. Unit cost...
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Brief Exercise 8-17 Structuring a Special-Order Problem Harrison Ford Company has been approached by a new customer with an offer to 10,000 units of its model IJ5 at a price of $5 each. The new customer is geographically rated from the company's other customers, and existing sales would not be affected. Harrison normally produces 75,000 units of IJ5 per year but only plans to produce and sell 60,000 coming year. The normal sales price is $12 per unit. Unit cost...
A customer has requested that Lewelling Corporation fill a special order for 2,600 units of product S47 for $31 a unit. While the product would be modified slightly for the special order, product S47's normal unit product cost is $20.70: Direct materials $ 6.20 Direct labor 3.00 Variable manufacturing overhead 3.30 Fixed manufacturing overhead 8.20 Unit product cost $ 20.70 Assume that direct labor is a variable cost. The special order would have no effect on the company's total fixed...