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Alborosie
3 years ago
10

Wallyworld Company manufactures a product with the following costs per unit at the expected production level of 84,000 units: Di

rect materials $12 Direct labor 36 Variable manufacturing overhead 18 Fixed manufacturing overhead 24 The company has the capacity to produce 90,000 units. The product regularly sells for $120. If a wholesaler offered to buy 4,500 units for $100 each, the effect of the special order on income would be a
Business
1 answer:
Marizza181 [45]3 years ago
8 0

Answer:

Income increased by $315,000

Explanation:

Since there is spare capacity available, we assume there are no incremental fixed costs and as such we only analyze relevant variable costs that vary with the order to identify the possible income effect.

Profit per unit = Order Selling price - Direct + Variable costs

Profit = 100 - 12 - 18 = $70

Total profit from the order = 70*4500 = $315,000

We do not include fixed costs as these will have to be paid regardless of the order. These fixed overheads are probably already absorbed fully given the current production level of 84000 units.

Hope that helps.

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Company Z's CPP has a Products and Completed Operations aggregate limit of $100,000, with a $20,000 limit for each occurrence. F
drek231 [11]

Answer:

65000$ remains available for complete operation losses.

Explanation:

$20,000 of the $25,000 loss is paid by the policy. The $15,000 loss is paid in full. Together these payments reduce the $100,000 aggregate limit to $65,000.

Calculation

100,0000-20,000-15,000 = 65,000 $.

8 0
3 years ago
Which action will be least helpful if youve been the victim of identity theft
xxTIMURxx [149]
The action that will be the least helpful if you've been the victim of an identity theft is to withdraw your money from all accounts.
This is not something you should do if this happens to you - but rather report this fraud to the officials so that they can fix this for you. They will be able to give you your last credit report and contact any company where you have money so as to let them know to freeze your account for a while until this get solved.
3 0
2 years ago
Terrence Industries charges manufacturing overhead to products by using a predetermined application rate, computed on the basis
puteri [66]

Answer:

See below

Explanation:

First, we need to get the predetermined rate

Predetermined rate = Cost of manufacturing overhead / Cost driver

= $1,800,000/60,000

= $30

We will now calculate the application.

Actual labor hours × rate

= 61,500 × $30

= $1,845,000

We will now compare actual with overhead cost

= Applied Overhead cost - Actual manufacturing overhead

= $1,845,000 - $1,810,000

= $35,000

The above is an over application of overhead cost because the cost applied exceed the actual cost.

5 0
2 years ago
Saint John Industries uses the percentage of credit sales method to estimate Bad Debt Expense. The company reported net credit s
photoshop1234 [79]

Answer:

$33,500

Explanation:

Relevant data provided

Total Credit Sales = $670,000

Percentage of bad debts = 5%

The computation of Bad Debt Expense is shown below:-

Bad Debt Expense = Total Credit Sales × Percentage of bad debts

= $670,000 × 5%

= $33,500

Therefore for computing the bad debt expenses we simply multiply the total credit sales with percentage of bad debts.

5 0
3 years ago
Rachel's Designs has 1,100 shares of 7%, $50 par value cumulative preferred stock issued at the beginning of 2019. All remaining
gladu [14]

Answer:

The dividend payable to the cumulative preferred stock holers in 2021 is $11,550 while the amount payable to common stock holders is $1,450.

Explanation:

Cumulative preferred stock dividends accrue and becomes payable when the reporting entity has favourable cash flows. Rachael Designs plans to make payment of $13,000 dividends in 2021. As the annual cumulative preferred dividend is $3,850 (1,100 shares x $50 x 7%), the amount due over three years will be $3,850 x 3 whcih is $11,550. Thus, out of the proposed cash outflow of $13,000, the amount of $11,550 will be paid to cumulative preferred stock holders while only $1,450 will be paid to the common stock holders.

5 0
3 years ago
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