What will be the effect on profit of accepting the order

Assignment Help Managerial Accounting
Reference no: EM133047128

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 3,400 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 $135 per unit.

Required - What will be the effect on profit of accepting the order?

Reference no: EM133047128

Questions Cloud

Why would developers contribute to open source : Why would developers contribute to open source? How can you make money with open source products?
Make a critic analysis of the advert industry in ethiopia : Discus at least three theories of moral development and the ethics and their respective philosophy, indicate the implication of each of these theories for busin
Minimize carbon footprint and a clean environment : As a consultant with the event management team at the Sofitel Resort and Spa that will be hosting a conference in August 2022 for young hospitality leaders in t
Appropriate ways of celebrating and promoting innovation : Discuss how you can promote and support appropriate ways of celebrating and promoting innovation. (50-100 Words)
What will be the effect on profit of accepting the order : At the start of the current year, the company received an order for 3,400 drives from a computer company in China. What will be the effect on profit
Culture and lifestyle factors : Company roots Canada wants to run their business in Denmark and Hong Kong.
Understanding of leadership styles : Why is an understanding of leadership styles, conflict management styles, and team building processes important to promote increased employee engagement
Healthcare policymaking process : The Healthcare policymaking process is complex, with multiple phases to go through before becoming a law. Formulation and implementation phases vital parts of t
Explain name of a franchising opportunity : We can consider Franchising as a kind of entrepreneurship. In that spirit, for this DB, your post should include:

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

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