Reference no: EM13136626
Calla Company produces skateboards that sell for $64 per unit. The company currently has the capacity to produce 90,000 skateboards per year, but is selling 81,700 skateboards per year. Annual costs for 81,700 skateboards follow.
Direct materials $ 955,890
Direct labor 612,750
Overhead 952,000
Selling expenses 550,000
Administrative expenses 479,000
Total costs and expenses $ 3,549,640
A new retail store has offered to buy 8,300 of its skateboards for $59 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.
•
40 percent of overhead is fixed at any production level from 81,700 units to 90,000 units; the remaining 60% of annual overhead costs are variable with respect to volume.
•
Selling expenses are 70% variable with respect to number of units sold, and the other 30% of selling expenses are fixed.
• There will be an additional $1.3 per unit selling expense for this order.
• Administrative expenses would increase by a $950 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.
|
Strategic challenges in executing power
: One of the most important questions in public administration is how to give administrators enough power to accomplish the work that policymakers want done, without having them exercise that power in a way that threatens democracy and liberty.
|
|
What would be the total cost-both fixed and variable
: Krouse Corporation reports that at an activity level of 8,100 units, its total variable cost is $517,995 and its total fixed cost is $197,700. What would be the total cost, both fixed and variable, at an activity level of 8,600 units? Assume that ..
|
|
Personal accountability in public administration
: David, your boss, shares with you his experiences with his new administrative assistant. He says, "You know Abdul, my administrative assistant, who joined me a few months ago.
|
|
How many joules are required
: how many joules are required to melt a 325 degrees Celsius ice cube at 0 degrees Celsius and to warm the liquid to 15 degrees Celsius
|
|
Prepare a three-column comparative income statement
: A new retail store has offered to buy 8,300 of its skateboards for $59 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 busin..
|
|
What amount of interest income should ms price recognize
: The note is to be repaid on December 31, 2014. The prevailing rate of interest for a loan of this type is 10%. The present value of $120,000 at 10% for three years is $90,156. What amount of interest income should Ms. Price recognize in 2012?
|
|
Find test value to spent on textbooks in term
: Seniors as to how much they spent on textbooks in that term. The bookstore believes that the two groups spend the same amount. What is the test value?
|
|
How much investment grow in five years
: Angie invested $50,000 she received from her grandmother today in a fund that is expected to earn 10% per annum. To what amount should the investment grow in five years if interest is compounded semi-annually?
|
|
Strategic challenges with employees
: You are a manager at a public organization, where you are responsible for supervising twenty employees. All these employees are experienced, and most have been transferred from other departments.
|