Required: 1-a. Prepare contribution margin income statements for the two-month period both with and without the special order. (Leave no cells blank be certain to enter "0" wherever required.)
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- 4. Incremental analysis - accepting a special order Essential Company normally produces and sells 4,000 video monitors for personal computers each month. Variable manufacturing costs amount to $62 per unit, and fixed manufacturing costs are $170,000 per month. The regular sales price of the monitors is $140 per unit. The company is considering a special order from a foreign computer maker to buy an additional 1,000 monitors per month at a special price of $70 per unit. Filling this special order would not affect Essential Company's regular sales volume or fixed manufacturing costs. (a) The average cost per unit at the 4,000-unit-per-month production level is per unit. $ (b) The average cost per unit at the 5,000-unit-per-month production level is per unit. $ (c) The amount of increase or decrease (indicate the correct term) in Essential Company's operating income that would result from accepting the special order is $ETS manufactures a component for its computer products. The annual demand for thiscomponent is 2500 units. The annual cost of maintaining inventory is10% per unit and the cost of preparing an order and setting up productionfor the order is $ 50.The machine used to make this part has a production rate of 10,000units per year and the cost is $ 22 per unit.a. Find the EPQ(Economic Production Quantity)A. How long does it take to produce the batch?B. How many batches will be produced per year?C. What is the maximum inventory level?D. What is the total cost per year?E. A supplier offers to sell a similar component for $ 25 per unit with a charge$ 5 per service per order. Should the company accept the offer?F. Find the average inventory level for each situation18.This is Cost Accounting. Explain briefly and answer. The following information applies to PANCIT CANTON CO., which supplies microscopes to laboratories throughout the country. PCC purchases the microscopes from a manufacturer which has a reputation for very high quality in its manufacturing operation. Annual demand (weekly demand=1/52 of annual demand) 20,800 units Orders per year 20 Lead time in days 15 days Cost of placing an order P100 What is the reorder point? Group of answer choices 875 units 857 units 1560 units 2080 units 940 units
- es Alpena Corporation manufactures smartphone and tablet cases. The following is the cost of each unit. $ 7.35 2.95 0.95 11.70 $ 22.95 Mc Graw Hill ! 1 Materials Labor Variable overhead Fixed overhead ($1,755,000 per year; 150,000 units per year) Total Decatur Devices has approached Alpena with an offer to buy 3,000 cases at a price of $17.80 each for its new specialty tablet designed for health care workers. The regular price of an Alpena case is $26.50. Alpena has the total capacity to produce 180,000 units without increasing its fixed overhead. Decatur Devices requires that each case use its branding, which requires a more expensive embossing step. This will result in an additional $2.85 per case labor cost. The material cost of of the Decatur case will be the same as for the current models. The Decatur order will also require a one-time rental of embossing equipment for $6,549. Q A Required: a. Prepare a schedule to show the impact of filling the Decatur Devices order on Alpena's…1 Green Company produces 1,000 parts per year, which are used in the assembly of one of its products. The unit product cost of these part is: Variable manufacturing cost Fixed manufacturing cost Unit product cost S12 9 S21 The part can be purchased from an outside supplier at $20 per unit. If the part is purchased from the outside supplier, two thirds of the fixed manufacturing costs can be eliminated. The annual impact on the company's net operating income as a result of buying from the outside supplier would be: (a) (b) (c) (d) S1,000 increase $2,000 increase $2,000 decrease None of the above. 2 If sales increase from $80,000 per year to $120,000 per year, and if the operating leverage is 5, then net operating income should increase by: (a) (b) (c) 250% 300% 334% (d) None of the above. 3. Dunklin Medical Clinic measures its activity in terms of patient-visits. Last month, the budgeted level of activity was 1,620 patient-visits and the actual level of activity was 1,540…25. Arturito Company was approached by the Jordan Brand to purchase 10,000 pairs of shoes for P550. The company currently operates at 45,000 pairs. The maximum capacity of Arturito is 50,000 pairs. If arturito will accept the order, it will need to stop some of their operations. The shoes normally sell for P600. Costs pertaining to the production are as follows: Manufacturing costs are as follows: Direct material per unit P200 Direct labor per unit 180 Variable overhead per unit 50 Fixed overhead per unit 30 Period costs are as follows: Variable selling costs P20 per unit Fixed administrative costs 450,000 If the company will accept the order: It will not incur any selling costs. Variable overhead of P12 per unit will not be incurred. Exportation costs of P150,000 will be incurred. If Arturito will accept the special order, what is the…
- 10 Phelps Industries is a multi-product company that currently manufactures 30,000 units of part ST35 each month for use in production of its products. The facilities now being used to produce part ST35 have a fixed monthly cost of $150,000 and a capacity to produce 35,000 units per month. If Phelps were to buy part ST35 from an outside supplier, the facilities would be idle, but its fixed costs would continue at 40% of their present amount. The variable production costs of Part ST35 are $11 per unit. If Phelps Industries continues to use 30,000 units of part ST35 each month, it would realize a financial advantage by purchasing this part from an outside supplier only if the supplier's unit price is less than: A. $11.00 В. $14.00 С. $13.00 D. $16.00 Е. None of the aboveThe Gear Division makes a part with the following characteristics: Production capacity 27,000 units Selling price to outside customers $ 20 Variable cost per unit $ 14 Fixed cost, total $ 102,000 The Motor Division of the same company would like to purchase 11,000 units each period from the Gear Division. The Motor Division now purchases the part from an outside supplier at a price of $19 each. Suppose the Gear Division has ample excess capacity to handle all of the Motor Division's needs without any increase in fixed costs and without impacting sales to outside customers. If the Gear Division refuses to accept the $19 price internally and the Motor Division continues to buy from the outside supplier, the company as a whole will be: Multiple Choice better off by $11,000 each period. worse off by $55,000 each period. worse off by $22,000 each period. worse off by $66,000 each period.Division X makes a part with the following characteristics: Production capacity.. 25,000 units $18 Selling price to outside customers. Variable cost per unit. $11 Fixed cost, total. $100,000 Division Y of the same company would like to purchase 10,000 units each period from Division X. Division Y now purchases the part from an outside supplier at a price of $17 each. Suppose that Division X is operating at capacity and can sell all of its output to outside customers. If Division X sells the parts to Division Y at $17 per unit, the company as a whole will be: Select one: a. better off by $10,000 each period. b. worse off by $20,000 each period. C. worse off by $10,000 each period. d. There will be no change in the status of the company as a whole.
- Anchor Company manufactures a variety of tool boxes. The firm is currently operating at 80% of its full capacity of 4,650 machine- hours per month. Each unit requires 30 minutes of machine time. Its sales manager has been looking for special orders to make productive use of the excess capacity. JCL Ltd., a potential customer, has offered to buy 10,000 tool boxes at $8.30 per box, provided that the entire quantity is delivered in two months. The current per-box cost data are as follows: Direct materials Direct labour (% hour at $6.80/hour) Total manufacturing overhead Total unit product cost Both fixed and variable overhead are allocated using direct labour-hours as a base. Variable overhead is $1.70 per direct labour-hour. Without the order, Anchor would have enough business to operate at 3.720 direct labour-hours in each of the next two months. The regular selling price of the tool boxes is $11.30. A sales commission of 50 cents per unit is paid to sales representatives on all regular…10 Ahron Company makes 8,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials $14.90 Direct labor 17.50 1.90 Variable manufacturing overhead Fixed manufacturing overhead 21.10 Total manufacturing cost $55.40 An outside supplier has offered to sell the company all of the units it needs. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $161,600 per year. If the part were purchased from the outside supplier, $7.50 of the fixed manufacturing overhead cost being applied to the part would be eliminated. What is the maximum amount the company should be willing to pay an outside supplier per unit for the part if the supplier commits to supplying all 8,000 units required each year? A. $49.50 B. $62.00 C. $48.80 D. $55.40 E. None of the…A company’s factory has the capacity to produce 13,000 units a year. Its normal production is 10,000 units, the costs of which are: Direct materials $30,000 Direct labour 20,000 Production overhead 40,000 90,000 Administrative and other overheads 10,000 100,000 The normal selling price is $12 per unit. A salesman says that a foreign buyer will take 2,000 units a year if the price can be cut to $8.50 per unit. Additional distribution costs would be $0.50 per unit for these export items. Of the production overhead costs, 25% are variable and 75% are fixed. All the administrative and other overhead costs should be taken as fixed. Required: a) Should the company accept the order? b) What effect would it have on the normal profits of the business?