One buyer, many sellers and no close substitutes
usually this won't have an exact example to match all the requirement
so, try get those small company as the example of your answer
Answer:
Financial advantage $159,000
Explanation:
unit variable cost = 15 + 12 + 8 + (25%×8) = $37
Note the selling variable cost is now 25% of the initial cost before the special order because of the 75% savings
The fixed cost were not considered in the analysis because they are not relevant. They would be incurred either way, whether the order is accepted or not
Financial advantage of the special order
$
Sales revenue from special order = (6,000× $65) = 390,000
Variable cost ( 6000× $37
) = (222,000
)
Cost of special machine <u>( 9,000)</u>
Financial advantage <u> 159,000</u>
Answer:
true...........................
Answer:
Total Inventory = 191,000
Explanation:
You will have to compare the cost column with the net realisable value.
So you need to do Sale price - Cost to sell or dispose to get the NRV of each one.
Then we compare with the cost, and pick the lowest.
![\left[\begin{array}{ccCCc}$Item&$Cost&$sale price&$cost to sell or dispose&$NVR\\Blades&41000&50000&2000&48000\\Towers&52000&54000&4000&50000\\Generators&20000&30000&2000&28000\\Gearboxes&80000&120000&12000&108000\\\end{array}\right] \\](https://tex.z-dn.net/?f=%5Cleft%5B%5Cbegin%7Barray%7D%7BccCCc%7D%24Item%26%24Cost%26%24sale%20price%26%24cost%20to%20sell%20or%20dispose%26%24NVR%5C%5CBlades%2641000%2650000%262000%2648000%5C%5CTowers%2652000%2654000%264000%2650000%5C%5CGenerators%2620000%2630000%262000%2628000%5C%5CGearboxes%2680000%26120000%2612000%26108000%5C%5C%5Cend%7Barray%7D%5Cright%5D%20%5C%5C)
So we have the following:
<u>Blades:</u> 41,000
<u>Towers:</u> 50,000
<u>Generators:</u> 20,000
<u>Gearboxes:</u> 80,000
Total Inventory = 191,000
