Solution-What effect would accepting order have on the

What effect would accepting order have on the company

Assignment Help Managerial Accounting

Reference no: EM132514984

Evaluating a Special Order

Sato Jewellers has had a request for a special order for 10 gold bangles for the members of a wedding party. The normal selling price of a gold bangle is $389.95 and its unit product cost is $26400 as shown below:

Direct materials $143.00

Direct labour 86.00

Manufacturing overhead 35.00

Unit product cost $264.00

Most of the manufacturing overhead is fixed and unaffected by variations in how much jewellery is produced in any given period. However, $7 of the overhead is variable, depending on the number of bangles produced. The customer would like special filigree applied to the bangles. This filigree would require additional materials costing $6 per bangle and would also require acquisition of a special tool costing $465 that would have no other use once the special order was completed.
This order would have no effect on the company's regular sales and the order could be filled using the company's existing capacity without affecting any other order.

Required:

Question 1: What effect would accepting this order have on the company's operating income if a special price of $349.95 is offered per bangle for this order? Should the special order be accepted at this price?

Reference no: EM132514984

Questions Cloud

Compute return on net operating assets : Disaggregate RNOA into components of profitability and productivity and show that the product of the two components equals RNOA.

What is the dsm 5 diagnosis for addiction : What is the DSM 5 Diagnosis for addiction and how is it defined? Describe the Integrative approach and how it is used to help an addiction client become.

Measures of central tendency : Which measures of central tendency would be affected by the change? Choose all that apply.

Describe developmental processes and issues : Be sure to completely answer all of the prompts for each bullet point. Use clear headings that allow your professor to know which bullet you are addressing.

What effect would accepting order have on the company : What effect would accepting this order have on the company's operating income if a special price of $349.95 is offered per bangle for this order?

Create schedule of cost of goods manufacture for november : Is an income statement for November possible, and how would make it if so? How can create schedule of cost of goods manufactured for November?

Regression model for company revenue : Suppose that we build a multiple linear regression model for company revenue (in millions of dollars), with predictors R&D spending

BUS504 Marketing Management Assignment : BUS504 Marketing Management Assignment Help and Solution - Describe how Uber's business model works and the role technology has played in its success

Determine the labor quantity variance : Determine the labor quantity variance and round to the nearest whole dollar. Enter a favorable variance as a negative number.

User Account

All Pages

What effect would accepting order have on the company

Reference no: EM132514984

Reference no: EM132514984

Questions Cloud

Reviews

Write a Review

Managerial Accounting Questions & Answers

Manage budgets and financial plans

Prepare a retained earnings statement

Prepare a master budget for the three-month period

Construct the companys direct labor budget

Evaluate the predetermined overhead rate

Determine the company''s bid

Compute the pool rates for the different activities

Prepare Company financial statements

Prepare an analysis of terracycles

Discuss the ethical issues

Political resources in emerging markets

Management accounting - ehsan electronics company

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT