If aaa locks cost had not been classified by cost behavior

Assignment Help Accounting Basics

Reference no: EM13595429

AAA Lock Manufacturing Co. makes and sells several models of locks. The cost records for the ZForce lock show that manufacture costs total $29.00 per lock. An analysis of this amount indicates that $16.75 of the total cost has a variable cost behavior pattern, and the remainder is an allocation of fixed manufacturing
overhead. The normal selling price of this model is $38.75 per lock. A chain store has offered to buy 15,000
Zforce locks from AAA lock at a price of $20.00 each to sell in a market that would not compete with AAA Lock regular business. AAA lock has manufacture capacity available and could make these locks without incurring additional fixed manufacturing overhead.

A. Calculate the effect on AAA Lock's operating income of accepting the order from the chain store.

B. If AAA Lock's cost had not been classified by cost behavior pattern, is it likely that a correct special order analysis would have been made? Explain your answer

C. Identify the key qualitative factors that AAA Lock managers should consider with respect to this special order decision.

Reference no: EM13595429

Questions Cloud

The compound mgi2 times xh2o is analyzed to determine the : question the compound mgi2 times xh2o is analyzed to determine the value of x. a 1.557-g sample of the compound is

The sweetwater candy company would like to buy a new : the sweetwater candy company would like to buy a new machine that would automatically dip chocolates. the dipping

Question what mass of copper would you expect to be : question what mass of copper would you expect to be deposited from a copper ii sulphate solution using a current of

Density of the solution is 105 gmol what is its molarity of : an aqueous kno3 solution is made using 87.6g of kno3 diluted to a total solution volume of 1.33l. density of the

If aaa locks cost had not been classified by cost behavior : aaa lock manufacturing co. makes and sells several models of locks. the cost records for the zforce lock show that

Question substances a and b are the same mass and at the : question substances a and b are the same mass and at the same initial temperature. when they are heated the final

Calcium carbonate or limestone is relatively insoluble in : calcium carbonate or limestone is relatively insoluble in water. at 25?c only 5.8 mg will dissolve in 1.0 liter of

Graphite and diamond are both made from carbon atoms list : graphite and diamond are both made from carbon atoms.a list some of the physical characteristics of each.b give one

Why is it not possible to convert bromobenzene to benzoic : why is it not possible to convert bromobenzene to benzoic acid by the nitrile method and how could this conversion be

User Account

All Pages