Camino Company manufactures designer to-go coffee cups. Each line of coffee cups is endorsed by a...

Question

Question

Camino Company manufactures designer to-go coffee cups. Each line of coffee cups is endorsed by a high-profile celebrity and Required 1 Required 2 Required 3 Complete the incremental analysis of the special order in the table provided below. (Enter p

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

1. Incremental Analysis
	Per Cup		Total
Incremental Revenue	$10.00		$1,30,000	=13000*10
Less: Incremental Costs
Variable COGS	$6.00	=(637500*80%)/85000	$78,000	=13000*6
Variable Operating Expenses	$0.50	=(53125*80%)/85000	$6,500	=13000*0.5
Endorsement Fee	$2.00	=26000/13000	$26,000
Incremental Profit	$1.50		$19,500

2. Should Camino accept this special order?
Yes
(As there is Incremental Profit.)

3. Price to be charged if operating at full capacity
	Per Cup		Total
Incremental Costs:
Variable COGS	$6.00	=(637500*80%)/85000	$78,000	=13000*6
Variable Operating Expenses	$0.50	=(53125*80%)/85000	$6,500	=13000*0.5
Endorsement Fee	$2.00	=26000/13000	$26,000
Contribution Lost from Normal sales:
Contribution Lost	9.5	=(1360000/85000)-6-0.5	$1,23,500
Sales Price for special order	$18.00		$2,34,000

Add a comment

Answer 2

Similar Homework Help Questions

Camino Company manufactures designer to-go coffee cups. Each line of coffee cups is endorsed by a...

Camino Company manufactures designer to-go coffee cups. Each line of coffee cups is endorsed by a high-profile celebrity and designed with special elements selected by the celebrity. During the most recent year, Camino Company had the following operating results while operating at 85 percent (102,000 units) of its capacity: Sales revenue $1,632,000 599,250 Cost of goods sold Gross profit Operating expenses Net operating income $1,032,750 51,000 981,750 Camino's cost of goods sold and operating expenses are 80 percent variable and...
Camino Company manufactures designer to-go coffee cups. Each line of coffee cups is endorsed by a...

Camino Company manufactures designer to-go coffee cups. Each line of coffee cups is endorsed by a high- profile celebrity and designed with special elements selected by the celebrity. During the most recent year Camino Company had the following operating results while operating at 75 percent (75.000 units) of its capacity Sales revenue Cost of goods sold $ 900,000 375,000 Gross profit Operating expenses S525,000 18,750 Net operating incomeS 506.250 Camino's cost of goods sold and operating expenses are 80 percent...
Camino Company manufactures designer to-go coffee cups. Each line of coffee cups is endorsed by a high- profile celebrity and designed with special elements selected by the celebrity. During the most...

Camino Company manufactures designer to-go coffee cups. Each line of coffee cups is endorsed by a high- profile celebrity and designed with special elements selected by the celebrity. During the most recent year, Camino Company had the following operating results while operating at 75 percent (67,500 units) of its capacity: $ 945,000 371,250 Sales revenue Cost of goods sold Gross profit Operating expenses $ 573,750 33,750 $ 540,000 Net operating income Camino's cost of goods sold and operating expenses are...

Camino Company manufactures designer to-go coffee cups. Each line of coffee cups is endorsed by a...

Camino Company manufactures designer to-go coffee cups. Each line of coffee cups is endorsed by a high-profile celebrity and designed with special elements selected by the celebrity. During the most recent year, Camino Company had the following operating results while operating at 75 percent (105,000 units) of its capacity: Sales revenue $ 1,470,000 Cost of goods sold 551,250 Gross profit $ 918,750 Operating expenses 26,250 Net operating income $ 892,500 Camino’s cost of goods sold and operating expenses are 80...
Check PA7-8 (Algo) Analyzing Special-Order Decision (LO 7-2,7-3) Camino Company manufactures designer to-go coffee cups. Each...

Check PA7-8 (Algo) Analyzing Special-Order Decision (LO 7-2,7-3) Camino Company manufactures designer to-go coffee cups. Each line of coffee cups is endorsed by a high-profile celebrity and designed with special elements selected by the celebrity. During the most recent year, Camino Company had the following operating results while operating at 75 percent 197,500 units) of its capacity: Sales revenue Coat of goods sold $1.560.000 560, 625 Operating expenses Net operatim incono 48,750 050,625 Camino's cost of goods sold and operating...
Starcups Coffee Company is launching a new sustainability Initiative that would reward customers for purchasing a...

Starcups Coffee Company is launching a new sustainability Initiative that would reward customers for purchasing a reusable cup. During the cup promotion, customers would pay an extra $100 for the reusable cup and would receive a 25 percent discount each time they return with the cup to buy a cup of coffee. Each week Starcups serves 40,000 customers who purchase an average of 2.5 cups of coffee per week (100,000 cups totall. Starcups's contribution margin income statement for a typical...

Starcups Coffee Company is launching a new sustainability initiative that would reward customers for purchasing a...

Starcups Coffee Company is launching a new sustainability initiative that would reward customers for purchasing a reusable cup. During the cup promotion, customers would pay an extra $1.00 for the reusable cup and would receive a 25% discount each time they return with the cup to buy a cup of coffee. Each week Starcups serves 49,000 customers who purchase an average of 3.00 cups of coffee per week (147,000 cups total) Starcups's contribution margin income statement for a typical week...
Carney Company manufactures cappuccino makers. For the first eight months of 2019, the company reported the...

Carney Company manufactures cappuccino makers. For the first eight months of 2019, the company reported the following operating results while operating at 80% of plant capacity: Sales (500,000 units) $90,000,000 Cost of goods sold 54,000,000 Gross profit 36,000,000 Operating expenses 24,000,000 Net income $12.000.000 An analysis of costs and expenses reveals that variable cost of goods sold is $95 per unit and variable operating expenses are $35 per unit. In September. Carney Company receives a special order for 40,000 machines...
Starcups Coffee Company is launching a new sustainability initiative that would reward customers for purchasing a...

Starcups Coffee Company is launching a new sustainability initiative that would reward customers for purchasing a reusable cup. During the cup promotion, customers would pay an extra $1.00 for the reusable cup and would receive a 20% discount each time they return with the cup to buy a cup of coffee. Each week Starcups serves 51,000 customers who purchase an average of 2.50 cups of coffee per week (127,500 cups total). Starcups's contribution margin income statement for a typical week...

Segmented Income Statements, Product-Line Analysis Alard Company produces blenders and coffee makers. During the past year,...

Segmented Income Statements, Product-Line Analysis Alard Company produces blenders and coffee makers. During the past year, the company produced and sold 65,000 blenders and 75,000 coffee makers. Fixed costs for Alard totaled $340,000, of which $184,000 can be avoided if the blenders are not produced and $142,500 can be avoided if the coffee makers are not produced. Revenue and variable cost information follows: Blenders Coffee Makers Selling price per appliance $24 $29 Variable expenses per appliance 18 27 Required: 1....

Camino Company manufactures designer to-go coffee cups. Each line of coffee cups is endorsed by a...

Homework Answers