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28 Sep 2019
K. Reggie Ltd. manufactures a single product with the following unit costs for 1,000 units: Direct materials £2,400; Direct labour £960; Factory overhead (30% variable) £1,800; Selling expenses (70% variable) £900; Administrative expenses (10% variable) £840; Total per unit £6,900. Recently, a company approached Reggie Ltd. about buying 200 units for £5,500 each. Currently, the models are sold to dealers for £7,800. Reggie Ltd.'s capacity is sufficient to produce the extra 200 units. No additional selling expenses would be incurred on the special order. If Reggie Ltd. wants to increase its profit by £20,000 on the special order, the minimum price it should charge per unit is
I. Boone Products had the following unit costs: Direct materials £24; Direct labour £10; Variable factory overhead £8; Fixed factory overhead (allocated) £18. A one-time customer has offered to buy 2,000 units at a special price of £48 per unit. Because of capacity constraints, 1,500 units will need to be produced during overtime. Overtime premium is £7 per unit. The additional profit (loss) that will be generated by accepting the special order is
J. The following per unit information relates to a product produced by Creamer Company: Direct materials £30, Direct labour £15, Variable overhead £30, Fixed overhead £18. Fixed selling costs are £500,000 per year, and variable selling costs are £12 per unit sold. Although production capacity is 600,000 units per year, the company expects to produce only 400,000 units next year. The product normally sells for £120 each. A customer has offered to buy 60,000 units for £90 each.The incremental cost associated with the special order is
K. The following per unit information relates to a product produced by Creamer Company: Direct materials £30, Direct labour £15, Variable overhead £30, Fixed overhead £20. Fixed selling costs are £500,000 per year, and variable selling costs are £15 per unit sold. Although production capacity is 600,000 units per year, the company expects to produce only 400,000 units next year. The product normally sells for £120 each. A customer has offered to buy 60,000 units for £90 each.The incremental revenue associated with the special order is
K. Reggie Ltd. manufactures a single product with the following unit costs for 1,000 units: Direct materials £2,400; Direct labour £960; Factory overhead (30% variable) £1,800; Selling expenses (70% variable) £900; Administrative expenses (10% variable) £840; Total per unit £6,900. Recently, a company approached Reggie Ltd. about buying 200 units for £5,500 each. Currently, the models are sold to dealers for £7,800. Reggie Ltd.'s capacity is sufficient to produce the extra 200 units. No additional selling expenses would be incurred on the special order. If Reggie Ltd. wants to increase its profit by £20,000 on the special order, the minimum price it should charge per unit is
I. Boone Products had the following unit costs: Direct materials £24; Direct labour £10; Variable factory overhead £8; Fixed factory overhead (allocated) £18. A one-time customer has offered to buy 2,000 units at a special price of £48 per unit. Because of capacity constraints, 1,500 units will need to be produced during overtime. Overtime premium is £7 per unit. The additional profit (loss) that will be generated by accepting the special order is
J. The following per unit information relates to a product produced by Creamer Company: Direct materials £30, Direct labour £15, Variable overhead £30, Fixed overhead £18. Fixed selling costs are £500,000 per year, and variable selling costs are £12 per unit sold. Although production capacity is 600,000 units per year, the company expects to produce only 400,000 units next year. The product normally sells for £120 each. A customer has offered to buy 60,000 units for £90 each.The incremental cost associated with the special order is
K. The following per unit information relates to a product produced by Creamer Company: Direct materials £30, Direct labour £15, Variable overhead £30, Fixed overhead £20. Fixed selling costs are £500,000 per year, and variable selling costs are £15 per unit sold. Although production capacity is 600,000 units per year, the company expects to produce only 400,000 units next year. The product normally sells for £120 each. A customer has offered to buy 60,000 units for £90 each.The incremental revenue associated with the special order is
Lelia LubowitzLv2
28 Sep 2019
