User Account

All Pages

Should gruden accept the special order

Assignment Help Accounting Basics
Reference no: EM131577655

Question - Gruden Company produces golf discs which it normally sells to retailers for $7 each. The per unit cost of manufacturing 20000 golf discs is:

Direct Materials                - $ 0.50

Direct Labor - 1.50

Variable overhead - 1.00

Fixed overhead - 2.00

Total - $ 5.00

Shank also incurs a 5% sales commission ($0.35 per disc) on each disc sold.

McGee Corporation offers Gruden $4.80 per disc for a special order of 5,000 discs. McGee would sell the discs under its own brand name in foreign markets not yet served by Gruden. If Gruden accepts the offer, its fixed overhead will increase from $40,000 to $46000 due to the purchase of a new imprinting machine. There will be no sales commission on the special order. Productive capacity is 30,000 golf discs.

Instructions -

(a) Should Gruden accept the special order? Why or why not?

(b) If productive capacity is only 24,000 golf discs, should Gruden accept the special order? Why or why not? What minimum selling price would have to be charged to have $2000 profit on the special order?

(c) If productive capacity is only 23,000 golf discs, should Gruden accept the special order? Why or why not?

Reference no: EM131577655

Questions Cloud

Create a case history for a person with an addiction : Create a case history for a person with an addiction that clearly traces contributing factors. Do not include identifying information.
Analyze the key driving forces to increase interdependence : Globalization is commonly described as the processes and forces leading to an ever-decreasing capacity of the nation state to govern within its territorial
Identify the strengths and weaknesses of each rating : Identify the strengths and weaknesses of each rating. What is the present value of the payments you will receive?
Will we ever have a complete understanding of human brain : Will we ever have a complete understanding of the human brain?What human characteristic will indicate that we have created a working, artificial brain?
Should gruden accept the special order : Gruden Company produces golf discs which it normally sells to retailers for $7 each. Should Gruden accept the special order? Why or why not
Characteristics apply to exchange-traded funds : Which of the following characteristics apply to exchange-traded funds (ETFs)?
How can change the deterministic finite-state automaton : Use the procedure you described in Exercise I and the finite-state automata you constructed in Exercise II to find a deterministic finite-state automaton.
Standardized testing for k-12 students in florida : Topics you may pick from (you may argue either side of the debate): The Cost of College Textbooks
Scenario in terms of risk and reward : Explain why the market will increase, decrease or remain the same under this scenario in terms of risk and reward. Is the market rational or not?

Reviews

Write a Review

Accounting Basics Questions & Answers

  Types of fraud impacting financial statements

Internal control is a plan of organization and system of procedures implemented by company _____ and the _____ designed to accomplish five objectives.The two most common types of fraud impacting financial statements are

  Methods available to allocate the four costs

You have been called on in your function as accounting manager to resolve the dispute. In your report you should explain the different methods available to allocate the four costs to the product cost.

  What is the effect on the 2014 financial statements when a

what is the effect on the 2014 financial statements when a capital expenditure during 2014 was incorrectly recorded as

  Explaining five appropriate substantive audit procedures

Prepare a report of not less than 2000 words explaining five appropriate substantive audit procedures you should perform in relation to the data contained in the inventory files identified above

  Hypothetical company based in the united kingdom

Kensington plc, a hypothetical company based in the United Kingdom, offers its employees a defined benefit pension plan. Kensington complies with IFRS. Th e assumed discount rate that the company used in estimating the present value of its pension..

  Prepare the journal entry to issue the bonds on july 1

on july 1 2009 a corporation issued 800000 of 9 8 yearbonds to yield 10. interest is paid semiannually on december

  Julia baker died leaving to her husband brent an insurance

julia baker died leaving to her husband brent an insurance policy contract that provides that the beneficiary brent can

  What is pheasant-s current e and p

Incalculating its taxable income for the year, Pheasant claimed an$8,000 deduction for the organizational expenses. What is Pheasant's current E & P?

  Determining the events and transactions

Buildings (concession stand, projection room, ticket booth, and screen) $10,000, No. 157 Equipment $10,000, No. 201 Accounts Payable $7,000, and No. 301 Owner?s Capital $40,000. During the month of March, the following events and transactions occu..

  Last year charles and kathy price bought a home with a

last year charles and kathy price bought a home with a dwelling replacement value of 200000 and insured it via an ho-3

  Concept related to entry to record the impairment

Lynch Printing Company determines that a printing press used in its operations has suffered a permanent impairment in value because of technological changes. An entry to record the impairment should:

  Estimating the company future revenues

Assume you are reviewing a company's annual report. In addition to actual revenues reported in the income statement, what other information disclosed would give you help in estimating this company's future revenues?

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