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

Steady state condition, Steady state condition In many cases, the Marko...

Steady state condition In many cases, the Markov process will converge to a steady state or equilibrium. In general, as number of transitions `n' increase, the state values

Determine abc system and service organizations, ABC System and service orga...

ABC System and service organizations The ABC system has been taken up as applied to a manufacturing organizations with the same efficiency. One basic characteristic of service

Chicken and hawk game, Chicken and Hawk (dove game) Two players meet at...

Chicken and Hawk (dove game) Two players meet at a one-lane bridge and each must choose whether to cross first or wait for the other. If both play Tough (T), they crash in the

Example of credit period, M/s ABC has an existing sales of Rs.50 lakhs and ...

M/s ABC has an existing sales of Rs.50 lakhs and permits a credit period of 30 days to its customers. The firm cost of capital is 10% and the ratio of variable cost to sales is 85

Total annual inventory cost , Ross White's machine shop uses 2,500 brackets...

Ross White's machine shop uses 2,500 brackets during the course of a year, and this usage is relatively constant by the year. These brackets are purchased from a supplier 100 miles

Permanent abandonment of premises, PERMANENT ABANDONMENT OF PREMISES A ...

PERMANENT ABANDONMENT OF PREMISES A company may find it more profitable to concentrate its output in some factories by closing down others. The decision, in this instance, is

What are the resons to use variance analysis, What are the Resons to use Va...

What are the Resons to use Variance analysis Variance analysis should be a continuous process for following reasons: 1) Labor rates, salary levels etc, changes due to union

Explain kaizen costing, Explain Kaizen costing It is a Japanese method...

Explain Kaizen costing It is a Japanese method used to manage cost during a product s planning and design stages and has been used by some Japanese firms for over twenty years

Continuous probability distribution, CONTINUOUS PROBABILITY DISTRIBUTION (U...

CONTINUOUS PROBABILITY DISTRIBUTION (USE OF NORMAL DISTRIBUTION) In reality the C-V-P variables might take any values in a continuous range. It could therefore be more appropriat

Break even analysis, I need an example on how to solve a single and two pro...

I need an example on how to solve a single and two product bundle

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