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Alika [10]
3 years ago
14

The Cozy Company manufactures slippers and sells them at $ 10 a pair. Variable manufacturing cost is $ 5.75 a​ pair, and allocat

ed fixed manufacturing cost is $ 1.75 a pair. It has enough idle capacity available to accept a​ one-time-only special order of 25 comma 000 pairs of slippers at $ 7.50 a pair. Cozy will not incur any marketing costs as a result of the special order. What would the effect on operating income be if the special order could be accepted without affecting normal​ sales: (a)​ $0, (b) $ 43 comma 750 ​increase, (c) $ 143 comma 750 ​increase, or​ (d) $ 187 comma 500 ​increase? Show your calculations.
Business
1 answer:
yulyashka [42]3 years ago
7 0

Answer:

(b) $ 43 comma 750 ​increase

Explanation:

Consider the Incremental Costs and Revenues arising from accepting the Special Order.

Note: Cozy Company has  enough idle capacity available to accept a​ one-time-only special order, therefore the fixed costs are irrelevant for this decision, since order is accepted within the normal operating capacity.

Sales (25,000×$ 7.50)                                  $187,500

Variable manufacturing (25,000× $ 5.75)  ($143,750)

Net Income/(loss)                                           $43,750

<u>Conclusion</u>

Therefore, Operating Income would increase by $43,750 as a result of Accepting the Special Order.

,

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On October 1, 20X4, Shaw Corp. purchased a machine for $126,000 that was placed in service on November 30, 20X4. Shaw incurred a
vichka [17]

Answer:

option (D)  $138,000

Explanation:

Data provided in the question:

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The correct answer is option (D)  $138,000

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3 years ago
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yarga [219]

The correct answer would be, Focus on research and development as a form of non-price competition.

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Explanation:

When a company increases its production of goods or services at the same part of the supply chain, this expansion is called as the horizontal integration. Horizontal integration is achieved through increasing production of goods or services through Mergers, acquisitions, internal expansions, etc.

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