I think the most appropriate answer would be D.
I hope it helped you!
Answer:
It is profitable to accept the special offer.
Explanation:
Giving the following information:
The shopping mall would like to purchase 200 extra-large white trees. Apex Company has the excess capacity to handle this special order. The shopping mall has offered to pay $120 for each tree.
Variable costs:
Direct materials $50.00
Direct labor (variable) $3.50
Variable manufacturing overhead $1.00
Additional variable cost= $6
This special order would require an investment of $10,000 for the molds required for the extra-large trees.
Because it is a special offer and there is unused capacity, we will not have into account the fixed costs (except the incremental fixed cost).
Unitary variable cost= 50 + 3.5 + 1 + 6= $60.5
Fixed costs= 10,000
Incremental income= (200*120) - (200*60.5) - 10,000= $1,900
It is profitable to accept the special offer.
Answer:
Part 1
$1,422,940
Part 2
$331,480
Explanation:
cost of the land calculation
Purchase Price $1305000
Cost to tear down building $121000
Sale of Salvages ($8400)
Leagl fees $5340
Total $1,422,940
The cost of the land that should be recorded by Wilson Co. is: $1,422,940
cost of the building calculation
Architect's fees $47000
Insurance $3900
Liability insurance $4200
Excavation cost $15480
city for pavement $9900
Borrowing Costs $251000
Total $331,480
The cost of the building should be recorded by Wilson Co. is $331,480
Usually this is known as quality control
