What will be the effect on profit of accepting the order

Assignment Help Accounting Basics
Reference no: EM133046229

Question - PowerDrive, Inc. produces a hard disk drive that sells for $175 per unit. The cost of producing 25,000 drives in the prior year was:

Direct material $625,000

Direct labor 375,000

Variable overhead 125,000

Fixed overhead 1,500,000

Total cost $2,625,000

At the start of the current year, the company received an order for 3,000 drives from a computer company in China. Management of PowerDrive has mixed feelings about the order. On the one hand they welcome the order because they currently have excess capacity. Also, this is the company's first international order. On the other hand, the company in China is willing to pay only $130 per unit. What will be the effect on profit of accepting the order?

Reference no: EM133046229

Questions Cloud

How much is the tax on notional gross taxable income : PAYG tax of $5,000 was withheld. How much is the tax on Notional Gross Taxable Income, ignoring tax offsets, Medicare Levy and Medicare Levy Surcharge
Nature of employment relationships : A Detailed Report or at Least three (3) ways the nature of employment relationships has changed in business within Jamaica.
Discuss how the branding process would be used : Discuss how the branding process would be used for a newly formed team in the National Basketball Association.
What is value creation : What is Value creation? What do you think could be value creation by your store? What do you think could be a value creation by manufacturer B?
What will be the effect on profit of accepting the order : On the other hand, the company in China is willing to pay only $130 per unit. What will be the effect on profit of accepting the order
Working for a management consultancy : Working for a management consultancy in the retail research department.
Describing and reflecting on professional issue : Create an essay describing and reflecting on an ethical or professional issue in early childhood education using appropriate literature and relevant documents
What is human capital : What is human capital? What is natural capital? Explain these with an example from your work, school, or family life for one of these ideas.
Explain proprietary knowledge : Using the text below explain proprietary knowledge (in your own words), then explain why it's important to corporate strategy

Reviews

Write a Review

Accounting Basics Questions & Answers

  Discuss problem regarding distributive shares

This year, Darrel's distributive share from Alcove Partnership includes $5,000 of interest income, $2,000 of dividend income, and $70,000 ordinary business.

  Preceding transactions in general journal form

During the fiscal year of June 2012, Claremont General Hospital, a not-for-profit healthcare organization, had the following revenue-related transactions.

  What amount of cost should be traced to specific products

The following are KTH Inc.'s production costs for Oct 2011: Direct materials 200,000. What amount of cost should be traced to specific products

  A company had a 22000 favorable direct labor efficiency

1. a company had a 22000 favorable direct labor efficiency variance during a time period when the standard rate per

  Weller companys variable manufacturing overhead should be

weller companys variable manufacturing overhead should be 1.15 per standard machine-hour and its fixed manufacturing

  How much will income increase on this product

If sales increase by 51,000 units and the cost behaviors do not change, how much will income increase on this product

  How much must report in interest income each year

Jasmine has owned $1,000 EE bond for 3 years. If the fixed rate of interest is 2%, how much must she report in interest income each year she owns the bond?

  Ethically dubious conduct please respond to the following

ethically dubious conduct please respond to the following from the case study assess the following items to determine

  Provide the journal entries to record the adjustment

Provide the journal entries to record the following: The adjustment of the trading security portfolio to fair value on December 31, 2016

  The jamesway corporation had the following situations on

the jamesway corporation had the following situations on december 2013.1.on december 20 2013 jamesway received a 5600

  Prepare revised trading account and show by journal entries

J. Smith and Co. are retailers of electrical applicances. As from 1st July, 1953, they have sold goods on hire-purchase terms as well as for cash.

  Determine the Consolidated Retained Earnings

P Company also paid the following acquisition costs: Direct Costs of P20,000. Determine the Consolidated Retained Earnings

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd