decision making special order, Managerial Accounting

decision making special order, Managerial Accounting

Assignment Help:

MNO Ltd produces and sells for $25 an office machine for which there is a heavy demand which the company is prevented from meeting because of a shortage of skilled labour. The direct material and labour costs of the machine are $10 and $ respectively. The labour force is paid $1.25 per hour. All other costs may be regarded as fixed.
The companies European representative has been invited by one of his customer to supply, for $2000, a batch machine of modified design and which customer wishes to incorporate into his own product.
MNO’s estimator hac calculated that the to execute the order. 200 direct labour hours would be required and the cost of material would be $850 excluding the cost of special switches which could be bought in for $100 or, alternatively, made by the company for a material cost of $40 and labour time of 20 hours.
Advise the management of MNO Ltd. Whether to accept the European order. Your answer should be supported by relevant calculations and should include comments on any other matters which you consider should be taken into account.

Related Discussions:- decision making special order

Differentail cost analyais, Differnetial cost analysis uses

Differnetial cost analysis uses

Case Study - Labor standards, Case Study Labor standards Geet...

Case Study Labor standards Geeta & Company has experienced increased production costs. The primary area of concern identified by management is direct labor. The compa

Irrelevant costs, Characteristics of irrelevant costs

Characteristics of irrelevant costs

Simple queues, Simple Queues A simple queue has the following character...

Simple Queues A simple queue has the following characteristics; 1) There is a simple service channel 2) There are ‘discrete’ customers e.g. customers in a bank, or aircra

What are the requirements of a good budgeting system, Requirements of a goo...

Requirements of a good budgeting system Following are the requirement of a good budgeting system: 1) Budgeting process should be backed and supported by the chief executive

Budget control, define budget control system

define budget control system

Master Budget, What is a pro forma financial statement and how does it rela...

What is a pro forma financial statement and how does it relate to the master budget?

Cash and treasury management, Cash is a significant current asset for the o...

Cash is a significant current asset for the operations of business. Cash is the fundamental input that maintains business running smoothly and continuously. In excess of cash and l

What are the main limitations of breakeven charts, QUESTION 1: Part A ...

QUESTION 1: Part A What are the main components of a set of Financial Statements and what are their respective purposes? Part B Trial balances of Hans Ltd on 30 Ju

Introduction to Management Accounting, What is Costco''s Financial decision...

What is Costco''s Financial decisions, Centralized or decentralized?

Write Your Message!

Name

Email id

Message

Verfication Code

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!

Submit Assignment

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