The cost of producing and selling a single unit of product

Assignment Help Financial Management

Reference no: EM131928555

Eley Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 57,000 units per month is as follows:

Direct materials $51.10

Direct labor $9.80

Variable manufacturing overhead $2.80

Fixed manufacturing overhead $20.70

Variable selling & administrative expense $5.20

Fixed selling & administrative expense $25

The normal selling price of the product is $120.10 per unit.

An order has been received from an overseas customer for 3,700 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 $2.90 less per unit on this order than on normal sales.

Direct labor is a variable cost in this company.

Suppose there is ample idle capacity to produce the units required by the overseas customer and the special discounted price on the special order is $93.40 per unit. By how much would this special order increase (decrease) the company's net operating income for the month?

Reference no: EM131928555

Questions Cloud

Monthly payment on loan prior to balloon payment : What is the monthly payment (PMT) on the loan prior to the balloon payment?

Plans on saving : Naomi plans on saving $2,000 a year and expects to earn an annual rate of 10.25 percent. How much will she have in her account at the end of 45 years?

Forecasting risk is best defined as : Forecasting risk is best defined as.

How will the merger alter the Industry HHI : Estimate the industry HHI. how will the merger alter the Industry HHI?

The cost of producing and selling a single unit of product : The cost of producing and selling a single unit of this product at the company's normal activity level of 57,000 units per month is as follows.

At what amount should corporation record cost of building : Nobles Corporation has acquired a properly that included both land and a building. At what amount should the corporation record the cost of building?

How many units of each model must the company sell : If the company has fixed costs of $269,500, how many units of each model must the company sell in order to break even?

What is the rexognized gain or loss by wayne : Norm owned stock with AB of $15k which he sold to his son Wayne for $12K. If Wayne sells the stock for $17k, what is the rexognized gain/loss by Wayne?

What section would code of professional conduct appear under : A nonaudit client requests assistance. Would this be a violation of the AICPA's Code of Professional Conduct? If so, what section would this appear under?

User Account

All Pages