What is incremental monthly revenue for staples-paperclips

Assignment Help Financial Accounting

Reference no: EM131286447

Walters Company is considering producing 120,000 pounds of paperclips and 140,000 pounds of staples each month from their current production of grade A and grade B wiring. The following are the expenditures to date:

Jan. 1 $100,000 Bulk steel purchase

Jan. 2 - Feb. 15 $150,000 Cost to melt steel

Feb. 16 - Mar. 31 $200,000 Cost to mold steel into wires, polish wires and wrap around large bolts

April 1 $3.00/pound market price for grade A wire

$4.00/pound market price for grade B wire

Grade A wire requires $450,000 of monthly variable costs to process into staples, which can be sold in the market on 5/1/XX for $7.00 per pound. Grade B wire requires $600,000 of monthly variable costs to process into paperclips, which can be sold in the market on 5/1/XX for $8.00 per pound.

Required: Need to show work

1) Should Walters Company sell their products in the marketplace on April 1st or on May 1st? What recommendation would you make to Walters Company?

2) What is the incremental monthly revenue (loss) for staples and paperclips?

3) How should the $450,000 of joint costs be accounted for in the further processing decision?

Reference no: EM131286447

Questions Cloud

Training and development of employee help with conflicts : How does training and development of employee's help with conflicts? What type of training and development can be completed?

How relationship selling differ from transactional selling : What is relationship selling? How does it differ from transactional selling?- What is prospecting? What does it mean to qualify the prospect?

Estimate the ratio of concentration of k+ inside : Assuming that the system is in equilibrium, estimate the ratio of concentration of K+ inside and outside the cell.

Research the issue to find facts to support your belief : Once you have chosen a side, research the issue to find facts to support your belief. Prepare a one page executive summary and a cover letter addressed to the Director of Human Resources, detailing three to five arguments in support of your belief..

What is incremental monthly revenue for staples-paperclips : Walters Company is considering producing 120,000 pounds of paperclips and 140,000 pounds of staples each month from their current production of grade A and grade B wiring. The following are the expenditures to date: hould Walters Company sell their p..

What are some ways you might approach a customer : What are some ways you might approach a customer? Would some work better in one situation or another?- What is the objective of the sales presentation?

Major sub disciplines of toxicology : Compare and discriminate between the major sub disciplines of toxicology and their roles in occupational safety and health and illustrate the mechanisms by which a toxicant passes through the cell membrane routes of absorption ,the distribution pr..

What is the rate of entropy production due to this coil : A heater coil is run at a voltage of 110 V and it draws 2.0 A current. If its temperature is equal to 200 °C, what is the rate of entropy production due to this coil?

Advantages and disadvantages of recruiting : 1. Present the advantages and disadvantages of recruiting through an internal search and external search? 2. What are the pros and cons of using employee referrals for recruiting workers?

User Account

All Pages