1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
LuckyWell [14K]
3 years ago
13

It costs Sunland Company $28 of variable costs and $18 of allocated fixed costs to produce an industrial trash can that sells fo

r $90. A buyer in Mexico offers to purchase 3000 units at $30 each. Sunland Company has excess capacity and can handle the additional production. What effect will acceptance of the offer have on net income?
Business
1 answer:
Usimov [2.4K]3 years ago
3 0

Answer:

The effect that will happen on the net income is an increase in $6,000.

Explanation:

For this product, we have:

Price: $90.

Variable cost: $28

Allocated fixed cost: $18

There is an opportunity to sell 3,000 units at $30, and the firm has excess capacity.

As the allocated fixed cost only counts for the existing level of production (before accepting the 3,000 additional units), they don't matter in the decision.

With excess capacity, the firm only incurs in the variable cost of $28 per unit. If the price is $30, the variation in the net income will be:

\Delta NI=Q(P'-VC)=3,000*(30-28)=3,000*2=6,000

The effect that will happen on the net income is an increase in $6,000.

You might be interested in
Homestead Co. reported the following in its statement of stockholders' equity on January 1, Year 4: Common stock, $10 par value,
Anna71 [15]

This question is to complex. In Order for this to be answerable you would need to put it into chunks

5 0
3 years ago
Which psychographic or lifestyle trend does this study support
melisa1 [442]

Answer:

where is the study at?

Explanation:

3 0
3 years ago
Define the business cycle.
Tpy6a [65]
<span>a cycle or series of cycles of economic expansion and contraction.</span>
6 0
3 years ago
Read 2 more answers
During June, Buttrey Corporation incurred $84,000 of direct labor costs and $24,000 of indirect labor costs. The journal entry t
Natali [406]

Answer:

debit to work in process of $84,000

Explanation:

Preparation of The journal entry to record the accrual of these wages

The journal entry to record the accrual of these wages would include a: DEBIT TO WORK IN PROCESS of 84,000

Debit work in process $84,000

Credit to factory payroll $84,000

(To record the accrual of wages)

Therefore The journal entry to record the accrual of these wages would include a: debit to work in process of $84,000

3 0
3 years ago
Thomlin Company forecasts that total overhead for the current year will be $15,500,000 with 250,000 total machine hours. Year to
ki77a [65]

Answer:

The predetermined overhead rate based on machine hours is $62

Explanation:

\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate

We will distribute the expected overhead cost over the costdriver. In this case, machine hours.

15,500,000/250,000 = 62

each machine hour carries 62 dollars of overhead.

The actual machine hours are used to determinate the applied overhead. While the actual cost it is compared with the applied to look for underapplication or overapplication.

6 0
3 years ago
Other questions:
  • - Safety (Security) Stock:
    7·1 answer
  • Suppose an economy’s national accounts are GNP = 100, C = 70, I = 40, G = 20 and EX = 20 where GNP is gross national product, C
    7·1 answer
  • What is artificial monopoly
    15·1 answer
  • Suppose the marginal propensity to consume is 0.8 and the government votes to increase taxes by $3 billion. Round to the nearest
    5·1 answer
  • The proper time to determine a​ company's business model is following the​ _______ of the business idea and prior to fleshing ou
    11·1 answer
  • Suppose that in the base period a college student buys 20 gallons of gasoline at $2 per gallon, 2 CDs for $13 each, and 4 movie
    6·1 answer
  • A partnership can be terminated by which of the following
    9·2 answers
  • Lein's net income is $200,000 and its operating cash flows are $240,000. The company reports total assets of $1.6 million and $1
    9·1 answer
  • What other considerations do manufacturers have when deciding on the dimensions of the cans, besides minimizing the amount of ma
    13·1 answer
  • Design quality is considered a(n) __________ for the firm. Multiple choice question. insignificant cost strategic decision servi
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!