What will be the affect on income if ccc accepts this order

Assignment Help Accounting Basics

Reference no: EM13568457

Country Cap Company (CCC) manufactures and sells ball caps with a special logo on the back of the cap that it has copyrighted. CCC sells its caps through many retail outlets and it has a set price of $23.00. Recently, the National Basketball Association (NBA) has approached CCC with an offer to to purchase 10,000 caps for $170,000 for this year's NBA Playoffs. The NBA caps require the use of NBA's own logo and will cause CCC to purchase a special machine and set-up costing $10,000 with no apparent future use or value (the machine imprints the 2011 championship winning team logo). CCC cost structure for the production of its caps is as follows:

Direct material: $7.00

Direct labor:....$2.00

Manufacturing Overhead: $8.00

In addition to the costs above, the special logo application will cost $2.00 per cap. While most of the Manufacturing Overhead is fixed, Variable Overhead is estimated at $3.00 per cap. It is expected that this order can be fulfilled within the existing capacity of CCC and will not affect existing sales.

Required: What will be the affect on income if CCC accepts this order? Based on your answer of income, should CCC accept the order? Show all your work for point consideration.

Reference no: EM13568457

Questions Cloud

Major themes in health care in canada include canadian : length10 to 12 pages double-spaced plus references and bibliography.in your paper clearly state the arguments or points

Mark macy is buying a house the house costs 250000 he : mark macy is buying a house. the house costs 250000. he plans to put 50000 down and borrow 200000 at 3 for 30 years.

Picksy company owns equipment that cost 38250 when : picksy company owns equipment that cost 38250 when purchased on 1 january 2009. it has been depreciated using the

Genetech has 2000000 in assets have decided to finance 30 : genetech has 2000000 in assets have decided to finance 30 with long-term financing 13 rate and 70 with short-term

What will be the affect on income if ccc accepts this order : country cap company ccc manufactures and sells ball caps with a special logo on the back of the cap that it has

The portfolio manager told the prospective client that she : at a meeting between a portfolio manager and a prospective client the portfolio manager stated that her firms bond

What is the effective rate on an 10000 installment loan : what is the effective rate on an 10000 installment loan with bi-monthly payments 1600 in interest for 2 years?i 16ii

On march 1 2012 chance company entered into a contract to : on march 1 2012 chance company entered into a contract to build an apartment building. it is estimated that the

The financial statements of danielle manufacturing company : the financial statements of danielle manufacturing company report net sales of 600000 and accounts receivable of 60000

User Account

All Pages