Reference no: EM13789468
Calla Company produces skateboards that sell for $61 per unit. The company currently has the capacity to produce 100,000 skateboards per year, but is selling 80,700 skateboards per year. Annual costs for 80,700 skateboards follow.
Direct materials $ 968,400
Direct labor 710,160
Overhead 948,000
Selling expenses 547,000
Administrative expenses 461,000
Total costs and expenses $ 3,634,560
A new retail store has offered to buy 19,300 of its skateboards for $56 per unit. The store is in a different market from Calla's regular customers and it would not affect regular sales. A study of its costs in anticipation of this additional business reveals the following:
Direct materials and direct labor are 100% variable.
30 percent of overhead is fixed at any production level from 80,700 units to 100,000 units; the remaining 70% of annual overhead costs are variable with respect to volume.
Selling expenses are 80% variable with respect to number of units sold, and the other 20% of selling expenses are fixed.
There will be an additional $3.1 per unit selling expense for this order.
Administrative expenses would increase by a $850 fixed amount.
Required:
Prepare a three-column comparative income statement that reports the following:
a. Annual income without the special order.
b. Annual income from the special order.
c. Combined annual income from normal business and the new business.
(Do not round intermediate calculations and round your answers to the nearest whole dollar.)
|
Select any two of the shakespearean sonnets
: Discussion 3: Select any two of the Shakespearean Sonnets you have read and write a two paragraph analysis that compares and contrasts the two. Specifically, your analysis should focus on the following items ONLY: themes, imagery, and rhythm. In the ..
|
|
Contribution margin per machine hour-each product generates
: The company presently operates the machine for a single eight-hour shift for 22 working days each month. Management is thinking about operating the machine for two shifts, which will increase its productivity by another eight hours per day for 22 day..
|
|
An annotated bibliography is a research tool
: Annotated Bibliography Overview: An annotated bibliography is a research tool that will help you to keep track of the sources you encounter while working on larger research projects. Generally, an annotated bibliography reflects an exhaustive search ..
|
|
Cash flows-operating activities using the indirect method
: Forten Company, a merchandiser, recently completed its calendar-year 2013 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, Prepare a complete statement of cash flow..
|
|
Combined annual income from normal and new business
: Calla Company produces skateboards that sell for $61 per unit. The company currently has the capacity to produce 100,000 skateboards per year, but is selling 80,700 skateboards per year. Annual costs for 80,700 skateboards follow. Annual income witho..
|
|
Secure the delivery of a replacement engine
: It cost haply $500 to secure the delivery of a replacement engine. The actual rental of the replacement engine cost $40,000 a day. And Haply lost the business of a client totaling $3,000,000. Haply sues Barksdale for incidental, consequential and com..
|
|
What is the effective rate of interest
: First bank of Sweetwater pays a 14% nominal rate of interest compounded monthly. What is the effective rate of interest?
|
|
Decides to set up a retirement fund by depositing
: Miguel decides to set up a retirement fund by depositing 15,000 at the end pf each year for 40 years. How much will he have then, if the interest rate is 8% compounded semi annually
|
|
Decides to set up retirement fund by depositing
: Sara decides to set up retirement fund by depositing $1500 at the end of each month for 40 years. How much will she have then, if the interest rate is 8% compounded semiannually?
|