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White raven [17]
3 years ago
10

Tullius Corporation has received a request for a special order of 8,000 units of product C64 for $50.00 each. The normal selling

price of this product is $53.25 each, but the units would need to be modified slightly for the customer. The normal unit product cost of product C64 is computed as follows:
Direct materials $18.10
Direct labor 7.40
Variable manufacturing overhead 5.20
Fixed manufacturing overhead 4.80
Unit product cost $35.50

Direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like some modifications made to product C64 that would increase the variable costs by $5.00 per unit and that would require a one-time investment of $43,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order.

Required:
How much is the 'effect' (incremental net operating income) on the company's total net operating income through accepting the special order?
Business
1 answer:
levacccp [35]3 years ago
7 0

Answer:

Incremental operating income   = $71,400

Explanation:

Unit variable cost = 18.10 + 7.4+ 5.20 + 5 = $35.7

Note that the $5 additional variable cost was necessitated by the special order , hence it was added

Sales from special order = ( 8,000× $50)                     400,000

Variable cost         ( 8,000 ××  $35.7                              ( 285600 )

Cost of special machine                                              <u>  (43,000)</u>

Incremental operating income                                     <u>   71,400</u>

Incremental operating income   = $71,400

Note that the fixed costs were not considered in the analysis , this simply because they are not relevant to the special order decision.. They would be incurred either way, whether the special order is accepted or not

You might be interested in
LO 5.2What is the cost of direct labor if the conversion costs are $330,000 and manufacturing overhead is $275,000?
zhenek [66]

Answer:

cost of direct labor =  $55,000

so correct option is A. $55,000

Explanation:

given data

conversion costs = $330,000

manufacturing overhead =  $275,000

to find out

cost of direct labor

solution

we get here cost of direct labor that is express as

cost of direct labor = Conversion costs - manufacturing overhead   ..............1

put here value we will get here

cost of direct labor = $330,000 - $275,000

cost of direct labor =  $55,000

so correct option is A. $55,000

7 0
3 years ago
Leadership in small firms is more ____ in comparison to the leadership in large corporations.
enyata [817]

Answer:

different

Explanation:

There is  a significant difference in small firms leadership compared to large firms depending on legal structures, number of employees in a firm and financial availability.

Large firms have more departments, employees, and operations compared to small ones. For instance, the leadership style and structure required to manage operations and employees in large firms will need to be highly structured to ensure there is effective  command and information flow. For small firms, a simple command and communication flow structure will suffice as the number of employees and departments involved are few.

8 0
3 years ago
Townsend Industries Inc. manufactures recreational vehicles. Townsend uses a job order cost system. The time tickets from Novemb
Sati [7]

Answer:

Part a.

Work In Process : Job 201 $64,200 (debit)

Work In Process : Job 202 $32,100 (debit)

Work In Process : Job 203 $25,350 (debit)

Work In Process : Job 204 $47,100 (debit)

Salaries Payable $168,750 (credit)

Part b.

Work In Process : Job 201 $94,160 (debit)

Work In Process : Job 202 $47,080 (debit)

Work In Process : Job 203 $37,180 (debit)

Work In Process : Job 204 $69,080 (debit)

Overheads $168,750 (credit)

Explanation:

Calculation of Labor Cost :

Job 201  = 4,280 hours × $15 = $64,200

Job 202 = 2,140 hours × $15  = $32,100

Job 203 = 1,690 hours × $15  = $25,350

Job 204 = 3,140 hours × $15  = $47,100

Application of overhead to jobs :

Job 201  = 4,280 hours × $22 = $94,160

Job 202 = 2,140 hours × $22  = $47,080

Job 203 = 1,690 hours × $22   = $37,180

Job 204 = 3,140 hours × $22 = $69,080

6 0
3 years ago
Fleet, Inc. manufactured 700 units of Product A, a new product, in 20Xl. Product Xs variable and fixed manufacturing costs per u
Ulleksa [173]

Answer:

The change in the dollar amount of inventory is $200 due to change in the inventory costing method.

Explanation:

The variable cost per unit is $6.00 while the fixed cost per unit is $2.00

Variable cost per unit = $6.00

Absorption cost pet units = $8.00

Total cost under absorption costing = Absorption cost per unit / number of units in ending inventory

Total absorption cost = $8.00 × 100 = $800

Total cost under variable cost = Variable cost per unit × number of units in ending inventory

Total variable cost = $6.00 × 100 = $600

Change in cost = Total absorption cost - Total variable cost

Change in cost = $800 - $600 = $200

3 0
2 years ago
Noelle, assistant manager at Green Gardens Restaurant, is preparing a questionnaire to help her evaluate customer satisfaction.
wariber [46]

Hi there, i cannot find the complete question so that i can pick an option from so im going to do my best to answer your question.

Explanation:

Noelle can use the question: on a scale of 1 to 4, rate your level of satisfaction of the meal at Green Gardens Restaurant. 1 to 4 can be represented as shown below.

1- very bad

2- bad

3- good

4- very good

With this sort of question to customers, Noelle would be able to get an understanding of how bad or well the restaurant is doing in terms of customer satisfaction.

Cheers.  

7 0
3 years ago
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