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

Gross working capital, Financial decisions are depends on specific consider...

Financial decisions are depends on specific considerations the major being the cash flows, liquidity and cost. Short-term working capital decisions or financial decisions are diffe

Managerial accounting, I need help with a solution in the Cornerstones of F...

I need help with a solution in the Cornerstones of Financial and Managerial Accounting textbook, Chapter 11, problem 11-51B on page 578. I need to create a statement of cash flows

Advantages and limitations of game theory, Advantages and limitations of ga...

Advantages and limitations of game theory Advantage: Game theory helps us to learn how to approach and understand a conflict situation and to improve the decision maki

Working capital, State Factors determining Working Capital requirement.

State Factors determining Working Capital requirement.

Transfer pricing-purposes, Transfer Pricing Transfer pricing can contri...

Transfer Pricing Transfer pricing can contribute directly to the process of departmental performance measurement and indirectly to the measurement of product performance. A

Mr, i want to get the answer for exercises 2.1 and 2.2 on strategic and tac...

i want to get the answer for exercises 2.1 and 2.2 on strategic and tactical decisions

Explain discretionary fixed costs and semi variable costs, Discretionary fi...

Discretionary fixed costs and Semi variable costs Discretionary fixed costs are those which are incurred as a result of management discretion. These costs have two importan

Transaction loans, These loans are given by the Banker for short periods fo...

These loans are given by the Banker for short periods for an exact activity like financing for a civil contract work. As the customer receives payment, the transaction will be repa

Profi t Planning, SK 2 Chapter 10: Master budgeting Objective How organisat...

SK 2 Chapter 10: Master budgeting Objective How organisations strive to achieve their financial goals by preparing a number of budgets that together form an integrated business pla

The case of a fixed discount-discount structures, The case of a fixed disco...

The case of a fixed discount When evaluating inventory decisions when a fixed discount rate exists, the appropriate procedure is to compare the total costs of the EOQ with the

Write Your Message!

Captcha
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