User Account

All Pages

How much would special order increase

Assignment Help Financial Accounting
Reference no: EM13519212

Jiambalvo Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 40,000 units per month is as follows:

Direct materials

$38.80

Direct labor

$9.70

Variable manufacturing overhead

$2.30

Fixed manufacturing overhead

$18.10

Variable selling & administrative expense

$1.70

Fixed selling & administrative expense

$8.80

The normal selling price of the product is $81.10 per unit.

An order has been received from an overseas customer for 3,000 units to be delivered this month at a special discounted price. This order would have no effect on the company's normal sales and would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $0.20 less per unit on this order than on normal sales.

Direct labor is a variable cost in this company.

Required

a. Suppose the company has ample idle capacity to produce the units required by the overseas customer and the special discounted price on the special order is $75.30 per unit. By how much would this special order increase (decrease) the company's net operating income for the month?

b. Suppose the company is already operating at capacity when the special order is received from the overseas customer. What would be the opportunity cost of each unit delivered to the overseas customer?

c. Suppose the company does not have enough idle capacity to produce all of the units for the overseas customer and accepting the special order would require cutting back on production of 1,000 units for regular customers. What would be the minimum acceptable price per unit for the special order?

Reference no: EM13519212

Questions Cloud

Explain what volume of hydrogen gas at stp will be produced : If 9.0 g of Al metal react with excess HCL according to the balanced equation (2Al(s) + 6HCL(aq)----> 2AlCl3(aq) + 3H2(g)), what volume of hydrogen gas at STP will be produced
Discuss how the decisions made that fateful day : Discuss how the decisions made that fateful day may have been influenced by framing on the part of both the NASA engineers and the engineers at Morton
What would be the impact on the companys overall profit : If the special order were accepted, what would be the impact on the company's overall profit?
Explain the solid product that remains after evaporation : A sample of sodium metal having a mass of 5.45 g reacts with excess water, and the water is later evaporated. What is the solid product that remains after evaporation, and how many grams of this product are expected to be formed
How much would special order increase : How much would special order increase (decrease) the company's net operating income for the month?
The issues with the recruitment of bilingual staff : The issues with the Recruitment of Bilingual Staff
Explain what mass of solid sucrose needed to add in water : What mass (in grams) of solid sucrose (C12H22O11) would need to be added to 2000 grams of water to make an ideal solution with a boiling point of 102.9°C
Should the company accept special order : Should the company accept special order and why - For this particular order, no variable selling and administrative costs would be incurred. This order would also have no effect on fixed costs.
Find the change in potential energy of this electron : An electron is released to accelerate from point 1 to point 2 in a potential region. The electric potentials at these points are V1 = -35 V and V2 = +200 V. Calculate the change in potential energy of this electron

Reviews

Write a Review

Financial Accounting Questions & Answers

  Determine the costs per equivalent unit for may

Finding  the equivalent units for materials and conversion - Determine the costs per equivalent unit for May?

  The scq corporation manufactures specialty medical tools

the scq corporation manufactures specialty medical tools ranging from 10000 to15000 per unit. the tools are used in

  Calculate aaron deduction for medical expenses

Aaron was reimbursed $1,300 by his insurance company for the medical expenses attributable to the skiing accident. Calculate Aaron’s deduction for medical expenses in 2011.

  Illustrate what is the difference between optimistic project

Illustrate what is the difference between optimistic projection and stretching the truth? Illustrate what kinds of checks and balances could you put into place to insure ethical behavior and accountability for both yourself and your employees?

  Explain is this the policy companies using us gaap

the assets are treated as if they had been purchased outright.” Explain i s this the policy companies using U.S. GAAP follow in accounting for capital leases?

  How will these errors affect inventory at year-end

This merchandise was omitted from the year-end physical count. How will these errors affect inventory at year-end and cost of goods sold for the year?

  Q presentation of an unrecognized tax benefit when a tax

q presentation of an unrecognized tax benefit when a tax credit carryforward or net operating loss carryforward exists.

  Compute the company manufacture overhead budget

Constructure the company manufactureing overhead budget for the upcoming fiscal yr and i need to compute the company manufacture overhead budget rate include variable and fixed manufacturing overhead for the upcoming fiscal yr round off to the near..

  Computation of depreciation under various methodsjon seceda

computation of depreciation under various methods.jon seceda furnace corp. purchased machinery for 315000 on may 1

  Determine the equal annual net cash flows from operating

Determine the equal annual net cash flows from operating the equipment. Round to the nearest dollar.

  As of this point in time the overhead is over applied

If the Collins Company uses a predetermined overhead rate based on machine hours for applying overhead, as of this point in time (year to date) the overhead is over/under applied by?

  What is the noncontrolling interest in juvyn net income

During the current year, Horton reported operational income of $160,000 and dividend income from Juvyn of $160,000 and dividend income from Juvyn of $27,000. At the same time, Juvyn reported operational income of $50,000 and dividend income from H..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd