Slugger Corporation produces baseball bats for kids that it sells for $36 each. At capacity, the company can produce 50,000 bats a year. The costs of producing and selling 50,000 bats are as follows: Cost per Bat Total costs Direct materials $13 $650,000 Direct manufacturing labor 5 250,000 Variable manufacturing overhead 2 100,000 Fixed manufacturing overhead 6 300,000 Variable selling expenses 3 150,000 Fixed selling expenses 2 100,000 Total costs $31 $1,550,000 Additional information: Suppose Slugger is currently producing and selling 40,000 bas. At this level of production and sales, its fixed costs are the same as given in preceding table. Bench Corporation wants to place a one-time special order for 10,000 bats at $23 each. Suppose Slugger will incur no variable selling costs for this special order. Q2-2. List all assumptions when Slugger makes the special order decision.
Slugger Corporation produces baseball bats for kids that it sells for $36 each. At capacity, the company can produce 50,000 bats a year. The costs of producing and selling 50,000 bats are as follows: Cost per Bat Total costs Direct materials $13 $650,000 Direct manufacturing labor 5 250,000 Variable manufacturing overhead 2 100,000 Fixed manufacturing overhead 6 300,000 Variable selling expenses 3 150,000 Fixed selling expenses 2 100,000 Total costs $31 $1,550,000 Additional information: Suppose Slugger is currently producing and selling 40,000 bas. At this level of production and sales, its fixed costs are the same as given in preceding table. Bench Corporation wants to place a one-time special order for 10,000 bats at $23 each. Suppose Slugger will incur no variable selling costs for this special order. Q2-2. List all assumptions when Slugger makes the special order decision.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter2: Basic Cost Management Concepts
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Problem 6CE: Jean and Tom Perritz own and manage Happy Home Helpers, Inc. (HHH), a house-cleaning service. Each...
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Slugger Corporation produces baseball bats for kids that it sells for $36 each. At capacity, the company can produce 50,000 bats a year. The costs of producing and selling 50,000 bats are as follows:
|
Cost per Bat |
Total costs |
Direct materials |
$13 |
$650,000 |
Direct manufacturing labor |
5 |
250,000 |
Variable manufacturing overhead |
2 |
100,000 |
Fixed manufacturing overhead |
6 |
300,000 |
Variable selling expenses |
3 |
150,000 |
Fixed selling expenses |
2 |
100,000 |
Total costs |
$31 |
$1,550,000 |
Additional information:
- Suppose Slugger is currently producing and selling 40,000 bas. At this level of production and sales, its fixed costs are the same as given in preceding table.
- Bench Corporation wants to place a one-time special order for 10,000 bats at $23 each.
- Suppose Slugger will incur no variable selling costs for this special order.
Q2-2. List all assumptions when Slugger makes the special order decision.
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