Homework Answers
- A special order is a one time customer order which often involves large quantity and low price.
- If company is operating at full capacity and need to meet the special order, company will have to turn away regular customers to accommodate the special order. This can only be justified if the order produces a large enough profit to overcome the disruption. If company has excess operating capacity then it can accept special order having regard to associated revenue and cost with special order.
- When the company is operating at less than its maximum capacity, the order should be accepted if the additional sales exceed the additional variable costs.
When the company has no excess capacity, the cost to be considered must include the lost contribution margin from sacrificing regular sales to be able to fill up the special order.
Add Answer to:
What is a special order? How does operating capacity affect a special order? In what scenario...
Please explain what costs you include when deciding to take the special order and How you...
Please explain what costs you include when deciding to
take the special order and How you get whether the business is
increasing or decreasing operating income by accepting the order.
Thank you
10:26 & D 62 nybusinesscourse.com Business Course Pope Company manufactures a variety of hiking boots and has received a special one-time-only order from a new customer. Pope has sufficient idle capacity to accept the special order to manufacture 1,100 pairs of boots at a price of $51.00 per...
SPECIAL ORDER DECISION Pinto Manufacturing. has a capacity of producing 300,000 units a year and sells...
SPECIAL ORDER DECISION Pinto Manufacturing. has a capacity of producing 300,000 units a year and sells them at $28 a unit. Fixed overhead is budgeted at $1,200,000 while fixed administration costs are estimated to be $450,000. At present Pinto is selling 250,000 units. A foreign distributor has made a one-time offer to purchase 40,000 units at $20 a unit. The customer will pay all freight costs and no commissions will be paid on this order, so variable selling costs will...
A manufacturer operating with excess capacity has been asked to fill a special order at a...
A manufacturer operating with excess capacity has been asked to fill a special order at a selling price of 58.25 per unit. The regular price is $10 per unit. No other use of the currently idle capacity can be found. The manufacturer's usual variable costs per unit are $3.50 for direct materials, $2.50 for direct labor, $1.00 for variable overhead, and $0.75 for sales commission. No sales commission would be paid on this special order. The average fixed overhead cost...
1) A)What is meant by the heat capacity of a body? How does it affect the...
1) A)What is meant by the heat capacity of a body? How does it affect the value of the rate constant? (For example, would a large heat capacity for the body imply a larger or a smaller value of “k”? B) would the rate constant (“k”) be the same or different for the heating and cooling processes in an experiment?
Adams Furniture receives a special order for 10 sofas for a special price of $4,400. The...
Adams Furniture receives a special order for 10 sofas for a special price of $4,400. The direct materials and direct labor for each sofa are $170. In addition, supervision and other fixed overhead costs average $220 per sofa. a1. What is the impact on operating income from accepting the special order? a2. Based solely on a short-term financial analysis, should Adams accept the special order? b1. If Adams is currently operating at full capacity, what would be the opportunity cost...
12. If a company must expand capacity to accept a special order, it is likely that...
12. If a company must expand capacity to accept a special order, it is likely that there will be A) an increase in unit variable costs. B) no increase in fixed costs. C) an increase in variable and fixed costs per unit. D) an increase in fixed costs. 13. If a plant is operating at full capacity and receives a one-time opportunity to accept an order at a special price below its usual price, then A) only variable costs are...
Special Order Pope Company manufactures a variety of hiking boots and has received a special one-time-only...
Special Order Pope Company manufactures a variety of hiking boots and has received a special one-time-only order from a new customer. Pope has sufficient idle capacity to accept the special order to manufacture 800 pairs of boots at a price of $48.00 per pair. Pope's normal selling price is $65.00 per pair of sneakers. Variable manufacturing costs are $35.00 per pair and fixed manufacturing costs are $12.00 a pair. Pope's variable selling expense for its normal line of sneakers is...
James & Co., which has excess capacity, received a special order for 4,000 units at a...
James & Co., which has excess capacity, received a special
order for 4,000 units at a price of $18 per unit. Currently,
production and sales are budgeted for 25,000 units without
considering the special order.
Budget information for the current year is presented below:
Sales
$
900,000
Less: Cost of goods
sold 600,000
Gross margin
$ 300,000
Less: Operating
expenses 200,000
Net income
...
James & Co., which has excess capacity, received a special order for 4,000 units at a...
James & Co., which has excess capacity, received a special
order for 4,000 units at a price of $18 per unit. Currently,
production and sales are budgeted for 25,000 units without
considering the special order.
Budget information for the current year is presented below:
Sales
$
900,000
Less: Cost of goods
sold 600,000
Gross margin
$ 300,000
Less: Operating
expenses 200,000
Net income
...
/ e problems (Managerial) ( Saved Adams Furniture receives a special order for 10 sofas for...
/ e problems (Managerial) ( Saved Adams Furniture receives a special order for 10 sofas for a special price of $3,000. The direct materials and direct labor for each sofa are $100. In addition, supervision and other fixed overhead costs average $150 per sofa. a1. What is the impact on operating income from accepting the special order? a2. Based solely on a short-term financial analysis, should Adams accept the special order? b1. If Adams is currently operating at full capacity,...
Please explain what costs you include when deciding to
take the special order and How you get whether the business is
increasing or decreasing operating income by accepting the order.
Thank you
10:26 & D 62 nybusinesscourse.com Business Course Pope Company manufactures a variety of hiking boots and has received a special one-time-only order from a new customer. Pope has sufficient idle capacity to accept the special order to manufacture 1,100 pairs of boots at a price of $51.00 per...
A manufacturer operating with excess capacity has been asked to fill a special order at a selling price of 58.25 per unit. The regular price is $10 per unit. No other use of the currently idle capacity can be found. The manufacturer's usual variable costs per unit are $3.50 for direct materials, $2.50 for direct labor, $1.00 for variable overhead, and $0.75 for sales commission. No sales commission would be paid on this special order. The average fixed overhead cost...
12. If a company must expand capacity to accept a special order, it is likely that there will be A) an increase in unit variable costs. B) no increase in fixed costs. C) an increase in variable and fixed costs per unit. D) an increase in fixed costs. 13. If a plant is operating at full capacity and receives a one-time opportunity to accept an order at a special price below its usual price, then A) only variable costs are...
Special Order Pope Company manufactures a variety of hiking boots and has received a special one-time-only order from a new customer. Pope has sufficient idle capacity to accept the special order to manufacture 800 pairs of boots at a price of $48.00 per pair. Pope's normal selling price is $65.00 per pair of sneakers. Variable manufacturing costs are $35.00 per pair and fixed manufacturing costs are $12.00 a pair. Pope's variable selling expense for its normal line of sneakers is...
James & Co., which has excess capacity, received a special
order for 4,000 units at a price of $18 per unit. Currently,
production and sales are budgeted for 25,000 units without
considering the special order.
Budget information for the current year is presented below:
Sales
$
900,000
Less: Cost of goods
sold 600,000
Gross margin
$ 300,000
Less: Operating
expenses 200,000
Net income
...
James & Co., which has excess capacity, received a special
order for 4,000 units at a price of $18 per unit. Currently,
production and sales are budgeted for 25,000 units without
considering the special order.
Budget information for the current year is presented below:
Sales
$
900,000
Less: Cost of goods
sold 600,000
Gross margin
$ 300,000
Less: Operating
expenses 200,000
Net income
...
/ e problems (Managerial) ( Saved Adams Furniture receives a special order for 10 sofas for a special price of $3,000. The direct materials and direct labor for each sofa are $100. In addition, supervision and other fixed overhead costs average $150 per sofa. a1. What is the impact on operating income from accepting the special order? a2. Based solely on a short-term financial analysis, should Adams accept the special order? b1. If Adams is currently operating at full capacity,...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 10 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 10 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 10 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 10 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 10 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 10 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 10 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 10 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 10 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 10 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 10 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 10 months ago