Reference no: EM132315584
Answer the following Questions :
1) Maize Company incurs a cost of $35.44 per unit, of which $19.60 is variable, to make a product that normally sells for $57.82. A foreign wholesaler offers to buy 5,700 units at $30.41 each. Maize will incur additional costs of $3.61 per unit to imprint a logo and to pay for shipping. Compute the increase or decrease in net income Maize will realize by accepting the special order, assuming Maize has sufficient excess operating capacity. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Reject Accept Net Income
Increase (Decrease)
Revenues $ $ $
Costs $ -------------- --------------------
Net income $ $ $
2) Moonbeam Company manufactures toasters. For the first 8 months of 2017, the company reported the following operating results while operating at 75% of plant capacity:
Sales (350,100 units) $4,378,000
Cost of goods sold 2,590,000
Gross profit 1,788,000
Operating expenses 840,600
Net income $947,400
Cost of goods sold was 74% variable and 26% fixed; operating expenses were 84% variable and 16% fixed.
In September, Moonbeam Company receives a special order for 20,800 toasters at $7.87 each from Luna Company of Ciudad Juarez. Acceptance of the order would result in an additional $2,900 of shipping costs but no increase in fixed costs.
(a) An incremental analysis for the special order. (Round computations for per unit cost to 4 decimal places, e.g. 15.2500 and all other computations and final answers to the nearest whole dollar, e.g. 5,725. er negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Reject order Accept Order Net Income
Increase
(Decrease)
Revenues $ $ $
Cost of goods sold ---------------- --------------------- -------------------
Operating expenses ----------------- ------------------- -------------------
Net income $ $ $