Question
In: Accounting
LL company budgeted 100,000 units for production during 2019. The following cost per unit information is...
LL company budgeted 100,000 units for production during 2019. The following cost per unit information is available: direct material = $5, direct labour = $10, variable manufacturing overhead = $4, variable selling per unit= $2. LL sells at $50 market price.
It received a special order for 10,000 units from a new customer in a country in which LL has never done business. This customer has offered special order price at $22 per unit. If LL accepts the order, there will be no related selling expenses for this order. LL has enough capacity to accept the order, without affecting its normal production plan.
If LL accepts this order, then the incremental contribution the order is making = $.............
Solutions
Expert Solution
| Incremental Analysis Special sales order decision | Per Unit | Total Order(10000 Units) | |
| Revenue from special sales order | 22 | 220,000 | |
| Less: variable expense | |||
| Direct Material | 5 | 50,000 | |
| Direct labour | 10 | 100,000 | |
| Variable overhead | 4 | 40,000 | |
| Incremental Contribution margin the order is making | 30,000 | ||
| Decision: Accept the special sales order | |||
ekkarill92 answered 2 years agoRelated Solutions
XX company budgeted 10,000 units for production during 2019. It has capacity to produce 12,000 units....
XX company budgeted 10,000 units for production during 2019. It
has capacity to produce 12,000 units. Fixed factory overhead is
allocated to production. The following estimated costs were
provided for 10,000 units:
Direct material
$
70,000
Direct labor
300,000
Variable manufacturing overhead
40,000
Fixed factory overhead costs
50,000
Total
$
460,000
All fixed costs are unavoidable.
XX received an offer from another company to manufacture the
10,000 units for $39, for the same quality.
In this case, when XX compares...
The Wright Company recorded the following inventory information during the month of October: UNITS UNIT COST...
The Wright Company recorded the following inventory information
during the month of October:
UNITS
UNIT COST
TOTAL COST
UNITS ON HAND
Balance on October 1
2,000
$1.00
$2,000
2,000
Purchased on October 8
1,200
$3.00
$3,600
3,200
Sold on October 20
1,500
1,700
Purchased on October 22
2,000
$4.00
$8,000
3,700
Sold on October 28
2,200
1,500
Purchase on October 29
1,000
$5.00
$5,000
2,500
Part B: Using the partially computed tables on
the next three pages, compute the cost...
A company typically sells 100,000 units at $10 per unit. It runs a promotion that discounts each unit by $4 per unit.
Test Your Understanding: : A company typically sells
100,000 units at $10 per unit. It runs a promotion that discounts
each unit by $4 per unit. To promote the discount, the company pays
a flat fee of $25,000. The company sells 75,000 additional units in
incremental sales. The company tells its marketing team to kill any
promotion that has<10% MROI.Should the company proceed with this promotion and
discount?Why or why not?
Cost of Production and Cost per Unit
A business produces one product which requires the following inputs:Direct Materials 6 kg at $ 4,80 per kgDirect labour 4 hour at $7 per hourBuilding cost $18.000 per periodLeased machine $600 for every 600 units (each machine has a capacity of 600 units)Store Cost $3.000 per period plus $3 per unita. What is the total cost of production and the cost per unit at each of the followingproduction levels?-1000 units-2000 unitsb. Explain why the cost per unit is different at...
Cost of Production and Cost per Unit
A business produces one product which requires the following inputs:Direct Materials 6 kg at $ 4,80 per kgDirect labour 4 hour at $7 per hourBuilding cost $18.000 per periodLeased machine $600 for every 600 units (each machine has a capacity of 600 units)Store Cost $3.000 per period plus $3 per unita. What is the total cost of production and the cost per unit at each of the followingproduction levels?-1000 units-2000 unitsb. Explain why the cost per unit is different at...
Diesel: At an activity volume of 60,000 units per year, the unit cost of production of...
Diesel: At an activity volume of 60,000 units per year, the unit
cost of production of this part is calculated as follows:
By Unit
Total
Raw Materials
$4
Direct Labor
$2.75
Variable indirect manufacturing costs
$0.50
Specific manufacturing indirect costs
$3
$180000
Common fixed manufacturing indirect costs
$2.25
$135000
Unit cost for product
$12.50
An outside supplier offered to sell Carthage Inc. this
electrical component at only $ 10 per unit. One-third of the
specific fixed manufacturing overhead is made...
Easy Breeze company produced 100,000 units, sold 90,000 units at a selling price per unit of...
Easy Breeze company produced 100,000 units, sold 90,000
units at a selling price per unit of $450, and incurred the
following manufacturing costs:
Direct Materials = $40 per unit
Direct Labor = $18 per unit
Factory overhead costs:
Variable Factory Overhead = $23 per unit
Fixed Factory overhead = $250,000
Semi-variable Factory overhead cost is $70,000. The
company utilized 14,000 machine hours during this period. The
following additional information is provided semi-variable factory
overhead into variable and fixed factory overhead...
Easy Breeze company produced 100,000 units, sold 90,000 units at a selling price per unit of...
Easy Breeze company produced 100,000 units, sold 90,000
units at a selling price per unit of $450, and incurred the
following manufacturing costs:
Direct Materials = $40 per unit
Direct Labor = $18 per unit
Factory overhead costs:
Variable Factory Overhead = $23 per unit
Fixed Factory overhead = $250,000
Semi-variable Factory overhead cost is $70,000. The
company utilized 14,000 machine hours during this period. The
following additional information is provided semi-variable factory
overhead into variable and fixed factory overhead...
The following data are given for Harry Company: Budgeted production 1,056 units Actual production 900 units...
The following data are given for Harry Company:
Budgeted production
1,056 units
Actual production
900 units
Materials:
Standard price per ounce
$1.758
Standard ounces per completed unit
11
Actual ounces purchased and used in
production
10,197
Actual price paid for materials
$20,904
Labor:
Standard hourly labor rate
$14.09 per hour
Standard hours allowed per completed
unit
4.4
Actual labor hours worked
4,635
Actual total labor costs
$75,319
Overhead:
Actual and budgeted fixed overhead
$1,054,000
Standard variable overhead rate
$24.00 per...
The following data are given for Stringer Company: Budgeted production 959 units Actual production 1,063 units...
The following data are given for Stringer Company:
Budgeted production
959 units
Actual production
1,063 units
Materials:
Standard price per ounce
$1.9
Standard ounces per completed unit
10
Actual ounces purchased and used in
production
10,949
Actual price paid for materials
$22,445
Labor:
Standard hourly labor rate
$14.96 per hour
Standard hours allowed per completed
unit
4.6
Actual labor hours worked
5,474.45
Actual total labor costs
$83,485
Overhead:
Actual and budgeted fixed overhead
$1,186,000
Standard variable overhead rate
$27.00 per...
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