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

What is pricing under decline stage, Q. What is Pricing under decline stage...

Q. What is Pricing under decline stage? Pricing under decline stage: under this stage sales are at their highest point. He should reduce the price if necessary taking the compe

Standard costing and budgetary control , STANDARD COSTING AND BUDGETARY CON...

STANDARD COSTING AND BUDGETARY CONTROL In practice, the terms standard cost and budgeted cost might be used interchangeably. Whereas it is possible to have budgeting without s

Explain the break even point pricing, Break even point or B.E.P. pricing me...

Break even point or B.E.P. pricing method : Break even point is the volume of sales at which the total sale revenue of the product is equal to its total cost. In other words, it

Determine the benefit of product life cycle costing, Benefit of product lif...

Benefit of product life cycle costing The benefits of product life cycle costing are summarized as follows: 1) The product life cycle costing results in earlier actions to g

Procedure of material acquisition, Procedure of material acquisition A ...

Procedure of material acquisition A stores record is maintained into which the quantity and value of materials received is entered. Issues of materials to production are made b

Integer programming, Integer Programming It is a technique for solving ...

Integer Programming It is a technique for solving a linear programming model with an added constraint that the decision variables must only be non-negative integers. In the

Credit information, So as to makes sure that the receivables are collected ...

So as to makes sure that the receivables are collected in occupied and on due date by the customers, prior information of their credit worthiness must be obtainable. This informati

Pre determined overhead rate, How to calculate POHR for a company

How to calculate POHR for a company

State the steps for standard costing system, State the steps for Standard c...

State the steps for Standard costing system standard costing system involves the following steps 1) Setting-up of standards for each element of cost: standards should be s

What is liquidity ratios, Liquidity ratios Liquidity refers to the abil...

Liquidity ratios Liquidity refers to the ability of concern to meet its current obligations as and when these become due. The short term obligations are met by realizing amount

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