How much will its income increase or decrease

Assignment Help Financial Accounting

Reference no: EM131204838

The following operating information reports the results of McKinney Company’s production and sale of 16,000 air-conditioned motorcycle helmets last year. Based on early market forecasts, McKinney expects the same results this year. Sales $2,320,000 Variable manufacturing expenses 896,000 Fixed manufacturing expenses 273,000 Variable selling and administrative expenses 112,000 Fixed selling and administrative expenses 226,000 The American Motorcycle Club has offered to purchase 1,900 helmets at a price of $61 each. McKinney has sufficient idle capacity to fill the order, which would not affect the company’s cost structure or regular sales. If McKinney accepts this order, by how much will its income increase or decrease?

Reference no: EM131204838

Questions Cloud

Accounting events-earned cash revenues-paid cash expenses : Majka Company was started on January 1, 2016. During 2016, the company experienced the following three accounting events: (1) earned cash revenues of $31,300, (2) paid cash expenses of $14,100, and (3) paid a $2,400 cash dividend to its stockholders...

Calculate total relevant cost to make and net cost to buy : Every year Kansas Company manufactures 5,300 units of part 231 for use in its production cycle. The per unit costs of part 231 are as follows: Direct materials $ 5 Direct labor 11 Variable manufacturing overhead 8 Fixed manufacturing overhead 10 Tota..

Straight line method and units of production : On 1/1/2016 Trublood, Inc. purchased a piece of machinery for use in operations. The total acquisition cost was $33,000. The machine has an estimated useful life of 3 years and a residual value $3,000. Assume that the units produced by the machine wi..

Determine the variable overhead efficiency variance : Variable Overhead Variances Assume that the best cost driver that Sony has for variable factory overhead in the assembly department is machine hours. During April, the company budgeted 680,000 machine hours and $7,000,000 for its Texas plant's assemb..

How much will its income increase or decrease : The following operating information reports the results of McKinney Company’s production and sale of 16,000 air-conditioned motorcycle helmets last year. McKinney has sufficient idle capacity to fill the order, which would not affect the company’s co..

Discuss whether the casualty loss should be deducted : Esther owns a large home on the East Coast. Her home is surrounded by large, mature oak trees that significantly increase the value of her home. In August 2014, a hurricane damaged many of the trees surrounding her home. In September 2014, Esther eng..

How much will byways income change if the company accepts : Byways Production has an annual capacity of 80,600 units per year. Currently, the company is making and selling 78,200 units a year. The normal sales price is $106 per unit; variable costs are $70 per unit, and total fixed expenses are $2,000,000. An..

Direct labor time variance-total direct labor cost variance : Direct Labor Variances The following data relate to labor cost for production of 20,000 cellular telephones: Actual: 8,450 hrs. at $22.50 Standard: 8,400 hrs. at $23.00 a. Determine the direct labor rate variance, direct labor time variance, and tota..

Balance sheet for the shredding machine and the building : Houston’s Shredding Service has just completed a minor repair on a shredding machine. The repair cost was $1,030, and the book value prior to the repair was $4,780. In addition, the company spent $8,500 to replace the roof on a building. Required Aft..

User Account

All Pages