Question
In: Accounting
Pfizer Company produced and sold 50,000 units of product and is operating at 75% of plant...
Pfizer Company produced and sold 50,000 units of product and is operating at 75% of plant capacity. Unit information about its product is as follows:
Sales Price $70
Variable manufacturing cost $45
Fixed manufacturing cost ($500,000 ÷ 50,000) 10 55
Profit per unit $15
The company received a proposal from a foreign company to buy 15,000 units of Pfizer Company's product for $50 per unit. This is a one-time only order and acceptance of this proposal will not affect the company's regular sales. The president of Pfizer Company is reluctant to accept the proposal because he is concerned that the company will lose money on the special order.
Instructions
a) Prepare a schedule reflecting an incremental analysis of this special order.
b) Should Pfizer accept/reject this order? Why?
Solutions
ekkarill92 answered 5 months agoRelated Solutions
FromZetherz Company produced and sold 50,000 units of product and is operating at 80% of plant...
FromZetherz Company produced and sold 50,000 units of product
and is operating at 80% of plant capacity. Unit information about
its product is as follows:
Sales Price
$68
Variable manufacturing cost
$42
Fixed manufacturing cost ($600,000 ÷ 50,000)
12
54
Profit per unit
$14
The company received a proposal from a Danish company to buy 10,000
units of FromZetherz Company's product for $49 per unit. This is a
one-time only order and acceptance of this proposal will not affect
the...
If the number of units produced exceeds the number of units sold, then net operating income...
If the number of units produced exceeds the number of units
sold, then net operating income under absorption costing will:
be equal to the net operating income under variable costing
less total fixed manufacturing costs.
be greater than net operating income under variable
costing.
be equal to the net operating income under variable
costing.
be equal to the net operating income under variable costing
plus total fixed manufacturing costs.
.
A company produces a single product. Last year, fixed
manufacturing...
Company ABC produces a single product. This year the company produced 20,000 units but only sold...
Company ABC produces a single product. This year the company
produced 20,000 units but only sold 15,000 units at the price of
$40 each. Variable manufacturing costs (including direct materials,
director labor, and variable manufacturing overhead) total $10 per
unit. Variable selling and administrative cost is $5 per unit.
Fixed manufacturing overhead cost is $100,000 each year. Fixed
selling and administrative cost is $120,000 each year. There is no
inventory at the beginning of this year.
What is the net...
Company ABC produces a single product. This year the company produced 20,000 units but only sold...
Company ABC produces a single product. This year the company
produced 20,000 units but only sold 15,000 units at the price of
$40 each. Variable manufacturing costs (including direct materials,
director labor, and variable manufacturing overhead) total $10 per
unit. Variable selling and administrative cost is $5 per unit.
Fixed manufacturing overhead cost is $100,000 each year. Fixed
selling and administrative cost is $120,000 each year. There is no
inventory at the beginning of this year.
What is the net...
Company ABC produces a single product. This year the company produced 20,000 units but only sold...
Company ABC produces a single product. This year the company
produced 20,000 units but only sold 15,000 units at the price of
$40 each. Variable manufacturing costs (including direct materials,
director labor, and variable manufacturing overhead) total $10 per
unit. Variable selling and administrative cost is $5 per unit.
Fixed manufacturing overhead cost is $100,000 each year. Fixed
selling and administrative cost is $100,000 each year. There is no
inventory at the beginning of this year. Required -
What is...
Units: Beginning inventory: 0 Produced: 70,000 COGS (in units) Sold: 50,000 Fixed costs maunfacturing overhead: $200,000...
Units:
Beginning inventory: 0
Produced: 70,000
COGS (in units)
Sold: 50,000
Fixed costs maunfacturing overhead: $200,000
Fixed cost selling expenses: $40,000
Total fixed costs: $350,000
Variable selling costs per unit are $5.00 per unit.
Manufacturing costs (per unit) Absorption Variable
Direct Materials $50 $50
Direct labor $25 $25
Variable manufacturing overhead. $5 $5
Fixed costs Manufacturing overhead. ? ?
(per units produced)
TOTAL $ ? ?
Find the blanks.
What is the difference between the amount reflected for ending
inventory...
Assume the following information for a company that produced 10,000 units and sold 8,000 units during...
Assume the following information for a company that produced
10,000 units and sold 8,000 units during its first year of
operations and produced 8,000 units and sold 10,000 units during
its second year of operations:
Per Unit
Per Year
Selling price
$
200
Direct materials
$
82
Direct labor
$
50
Variable manufacturing overhead
$
10
Sales commission
$
8
Fixed manufacturing overhead
$
300,000
Using absorption costing, what is the cost of goods sold for the
second year of...
If 12,500 units are produced and sold, what is the variable cost per unit produced and sold?
Martinez Company’s relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost Per UnitDirect materials$ 5.60Direct labor$ 3.10Variable manufacturing overhead$ 1.40Fixed manufacturing overhead$ 4.00Fixed selling expense$ 2.60Fixed administrative expense$ 2.20Sales commissions$ 1.20Variable administrative expense$ 0.454. If 12,500 units are produced and sold, what is the variable cost per unit produced and sold? (Round your answer to 2 decimal places.)
Number of units produced 30, 000 Number of units sold  
Number of units
produced 30,
000
Number of units
sold 28,000
Selling
price $20
Beginning
inventory 0
Fixed selling and administrative
costs $ 20,000
Fixed manufacturing
overhead $
150,000
Direct materials cost per
unit 2
Direct manufacturing
labor 6
Variable manufacturing overhead per unit
4
Variable selling expenses per
unit 2
FMOH per
unit
5
1.Operating Income under Absorption method
is
2.If Sales Revenue $560,000 then Gross Margin under Absorption
method is
3.Cost of Goods Sold and Ending inventory under Absorption
costing method are:
4.What is...
1. If 18,000 units are produced and sold, what is the variable cost per unit produced and sold?
Refer to the data given in Exercise 1-7. Answer all questions independently.
Kubin Company's relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,000 units, its average costs per unit are as follows:
Required:
1. If 18,000 units are produced and sold, what is the variable cost per unit produced and sold?
2. If 22,000 units are produced and sold, what is the variable cost per unit produced and sold?
3. If 18,000 units are...
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