Question
In: Accounting
Gloucester Ltd. manufactures specialized valves. For the first six months of 2015 the company reported the...
Gloucester Ltd. manufactures specialized valves. For the first six months of 2015 the company reported the following operating results.
|
Amount |
Per unit |
|
|
Sales |
$4,000,000 |
$50.00 |
|
Cost of goods sold |
3,200,000 |
40.00 |
|
Selling and administrative expenses |
320,000 |
4.00 |
|
Net income |
$480,000 |
$6.00 |
Fixed costs included in cost of goods sold in the period were $800,000; fixed costs included in selling and administrative expenses were $60,000.
Gloucester recently received a special order from an overseas industrial customer, Brewery Supply Industries (BIS), for 9,000 brewery valves at a price of $36.50 each. Accepting the order would increase variable selling and administrative expenses by $0.75 per unit because of additional shipping costs, but it would not increase fixed costs or any other unit variable costs.
Assume that Gloucester currently has just sufficient excess capacity to fill this one-time order which will take 6 months to fill.
Ignore income taxes.
Required
A. Ms Keating, VP Sales, is still unsure about the wisdom of accepting the BIS order. She has asked you to prepare a full report dealing with all the relevant issues and make a recommendation to her as to whether Gloucester Ltd. Should accept this order. Justify your conclusion, citing all relevant factors, quantitative and qualitative
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Gloucester Ltd. manufactures specialized valves. For the first six months of 2002 the company reported the...
Gloucester Ltd. manufactures specialized valves. For the first
six months of 2002 the company reported the following operating
results.
Amount
Per unit
Sales
$4,000,000
$50.00
Cost of goods sold
3,200,000
40.00
Selling and administrative expenses
320,000
4.00
Net income
$480,000
$6.00
Fixed costs included in cost of goods sold in the period were
$800,000; fixed costs included in selling and administrative
expenses were $60,000.
Gloucester recently received a special order from an overseas
industrial customer, Brewery Supply Industries (BIS), for...
Parker Manufacturers produces can openers. For the first six months of 2011, the company reported the...
Parker Manufacturers produces can
openers. For the first six months of 2011, the company reported the
following operating results while operating at 80% of plant
capacity.
Sales
$4,000,000
Cost of goods
sold
2,500,000
Gross
profit
1,500,000
Operating
expenses
1,000,000
Net
income
$ 500,000
Cost of goods sold was 70% variable
and 30% fixed. Operating expenses were 70% variable and 30% fixed.
In September 2011, Parker Manufacturers receives a special order
for 15,000 can openers at $7.50 from a foreign company....
Moonbeam Company manufactures toasters. For the first 8 months of 2020, the company reported the following...
Moonbeam Company manufactures toasters. For the first 8 months
of 2020, the company reported the following operating results while
operating at 75% of plant capacity: Sales (350,000 units)
$4,379,000 Cost of goods sold: 2,605,000 Gross profit 1,774,000
Operating expenses 839,600 Net income $934,400 Cost of goods sold
was 72% variable and 28% fixed; operating expenses were 82%
variable and 18% fixed. In September, Moonbeam receives a special
order for 19,100 toasters at $7.99 each from Luna Company of Ciudad
Juarez....
Moonbeam Company manufactures toasters. For the first 8 months of 2020, the company reported the following...
Moonbeam Company manufactures toasters. For the first 8 months of
2020, the company reported the following operating results while
operating at 75% of plant capacity:
Sales (341,600 units)
$4,375,000
Cost of goods sold
2,610,800
Gross profit
1,764,200
Operating expenses
841,190
Net income
$923,010
Cost of goods sold was 70% variable and 30% fixed; operating
expenses were 80% variable and 20% fixed.
In September, Moonbeam receives a special order for 23,100 toasters
at $7.85 each from Luna Company of Ciudad Juarez....
Moonbeam Company manufactures toasters. For the first 8 months of 2017, the company reported the following...
Moonbeam Company manufactures toasters. For the first 8 months
of 2017, the company reported the following operating results while
operating at 75% of plant capacity:
Sales (349,300 units)
$4,370,000
Cost of goods sold
2,602,000
Gross profit
1,768,000
Operating expenses
839,500
Net income
$928,500
Cost of goods sold was 77% variable and 23% fixed; operating
expenses were 87% variable and 13% fixed.
In September, Moonbeam Company receives a special order for 24,400
toasters at $8.38 each from Luna Company of Ciudad...
Moonbeam Company manufactures toasters. For the first 8 months of 2017, the company reported the following...
Moonbeam Company manufactures toasters. For the first 8 months
of 2017, the company reported the following operating results while
operating at 75% of plant capacity:
Sales (349,900 units)
$4,373,000
Cost of goods sold
2,602,000
Gross profit
1,771,000
Operating expenses
839,800
Net income
$931,200
Cost of goods sold was 74% variable and 26% fixed; operating
expenses were 84% variable and 16% fixed.
In September, Moonbeam Company receives a special order for 20,800
toasters at $8.48 each from Luna Company of Ciudad...
Moonbeam Company manufactures toasters. For the first 8 months of 2017, the company reported the following...
Moonbeam Company manufactures toasters. For the first 8 months
of 2017, the company reported the following operating results while
operating at 75% of plant capacity: Sales (349,100 units)
$4,377,000 Cost of goods sold 2,594,000 Gross profit 1,783,000
Operating expenses 839,400 Net income $943,600 Cost of goods sold
was 67% variable and 33% fixed; operating expenses were 77%
variable and 23% fixed. In September, Moonbeam Company receives a
special order for 24,500 toasters at $8.38 each from Luna Company
of Ciudad...
Moonbeam Company manufactures toasters. For the first 8 months of 2020, the company reported the following...
Moonbeam Company manufactures toasters. For the first 8 months
of 2020, the company reported the following operating results while
operating at 75% of plant capacity:
Sales (341,600 units)
$4,370,000
Cost of goods sold
2,591,280
Gross profit
1,778,720
Operating expenses
836,920
Net income
$941,800
Cost of goods sold was 70% variable and 30% fixed; operating
expenses were 80% variable and 20% fixed.
In September, Moonbeam receives a special order for 15,000 toasters
at $7.50 each from Luna Company of Ciudad Juarez....
Please construct a Profit & Loss Statement for the first six months of the year 2015,...
Please construct a Profit & Loss Statement for the first six
months of the year 2015, on Jeff's Auto Repair with the following
information:
Purchase of spare
parts
$65,000
Salary paid to
mechanics
$127,000
Commission paid to marketing
agents
$18,000
Money received for cars
repaired
$245,000
Money received for storage of
cars
$45,000
Sales of
tires
$84,000
Rent of shop paid to
landlord
$28,000
Other expenses paid
out
$23,000
Tax
bracket ...
Pro Sports Inc. manufactures basketballs for professional basketball associations. For the first six months of 2020,...
Pro Sports Inc. manufactures basketballs for professional
basketball associations. For the first six months of 2020, the
company reported the following operating results while operating at
90% of plant capacity:
Amount
Per Unit
Sales
$5,616,000
$52.00
Cost of goods sold
3,672,000
34.00
Selling and administrative expenses
486,000
4.50
Net income
$1,458,000
$13.50
Fixed costs for the period were cost of goods sold of $1,080,000,
and selling and administrative expenses of $194,400.
In July, normally a slack manufacturing month, Pro Sports...
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