Regal bowling ball division

Assignment Help Accounting Basics

Reference no: EM13159166

The BonMatin Corporation produces all types of bowling balls. The Bowling Ball Division is currently producing 3,750 bowling balls per year with a capacity of 5,200. The variable costs assigned to each bowling ball are $576 and annual fixed costs of the division are $878,500. The bowling balls sell for $1,100. The Regal Bowling Ball Division wants to buy 1,450 bowling balls at $525 for its custom bowling ball business. The Home Bowling Ball manager refused the order because the price is below variable cost. The Regal manager argues that the order should be accepted because it will lower the fixed cost per bowling ball from $234.27 to $168.94 and will take the division to full capacity, thus making operations more efficient.

Bowling Ball Division:
Production 3,750 bowling balls
Sales price per bowling ball $1,100
Annual fixed costs $878,500
Capacity 5,200 bowling balls
Variable cost per bowling ball $576

Should the order from the Regal Bowling Ball Division be accepted by the Bowling Ball Division? Why?

Reference no: EM13159166

Questions Cloud

Explain an equilibrium mixture of propanoic acid : An equilibrium mixture of propanoic acid (propionic acid), CH3CH2COOH, and its conjugate base has a pH of 4.87. Draw the form that predominates after H3O is removed from the equilibrium mixture

Describe the supply and demand shifts that are occuring : Describe the supply and demand shifts that are occuring. What would happen to the demand curve if the major taxi companies lowered their rates.

Discuss whether the concerns over gm foods are justified : In 2004, 45% of the corn, 85% of the soybeans, and 76% of the cotton grown in the United States was from genetically modified (GM) seeds. According to The New York Times, most Americans have probably eaten some food derived from GM corn or soy.

What volume will the gas occupy if the pressure changes : A gas occupies a volume of 2.45 L at a pressure of 1.03 atm and a temperature of 293K. What volume will the gas occupy if the pressure changes to 0,980 atm and the temperature remains unchanged?

Regal bowling ball division : Should the order from the Regal Bowling Ball Division be accepted by the Bowling Ball Division? Why?

Explain why water is not plotted on the delta t : explain why water is not plotted on the delta t versus molecular mass graph in the analysis .(hint:what makes water different from the other 3 solvents?

Consider both sides of the argument : Consider both sides of the argument and come to a decision of whether to close the plant or continue to operate it. How would you explain to either the president or the CEO that he or she is wrong?

What is the difference between a cdna and a genomic library : When looking for a gene of interest, we often scan cDNA libraries. What is the difference between a cDNA and a genomic library? Can you think of situations in which we would probe a genomic library?

What factors may be important to evolution of eusociality : Kin selection theory provides hypotheses of why organisms may provide benefits to relatives.

User Account

All Pages