Question No. One "MBACO" has an annual production capacity of 20,000 units. The costs associated with...

Question No. One

"MBACO" has an annual production capacity of 20,000 units. The costs associated with production and sale of the company's product are given below:

Manufacturing costs:	LE
Per unit variable	12
Per unit fixed	5
Selling and administrative costs:
( Include sales commissions 4% of sales)	3
Per unit Fixed	3

The company presently is selling 15,000 units annually at a selling price of LE 25 each. A special order has been received from a distributor who wants to purchase 5,000 units at a special price. Regular sales would not be affected by this order and the order could be filled without any impact on total fixed costs. Sales commissions per unit on the special

order would be reduced by 50%. If the special sales order is accepted the company expects to achieve net profit LE 25000 from the regular sales and special sales order.

Required:

1- Prepare a detailed income statement if the special sales order is accepted .

2- What are the necessary conditions to accept or reject this special sales order?

Expert Solution

ekkarill92 answered 1 year ago

"MBACO" has an annual production capacityof 20,000 units. The costs associated with the production and sale...

"MBACO" has an annual production capacityof 20,000 units. The costs associated with the production and sale of the company's product are given below: LE 15 Per unit variable manufacturing cost 100,000 Total fixed manufacturing cost 5 Per unit variable selling and administrative cost (Include sales commissions 10% of sales) 60,000 Total fixed selling and administrative cost The company presently is selling 15,000 units annually at a selling price of LE 30 each. A special order has been received from a...

Harris Company has a current production level of 20,000 units per month. Unit costs at this...

Harris Company has a current production level of 20,000 units per month. Unit costs at this level are: Direct materials $0.25 Direct labor 0.40 Variable overhead 0.15 Fixed overhead 0.20 Marketing - fixed 0.20 Marketing/distribution - variable 0.40 Current monthly sales are 18,000 units. Jimi Company has contacted Harris Company about purchasing 1,500 units at $2.00 each. Current sales would not be affected by the one-time-only special order, and variable marketing/distribution costs would not be incurred on the special order....

Toys for fun Co. is working at full production capacity producing 20,000 units of a unique...

Toys for fun Co. is working at full production capacity producing 20,000 units of a unique product, OB1. Sale price and costs per unit for OB1 are as follows: Sale price $ 40 Direct materials $ 5 Direct manufacturing labour $ 8 Manufacturing overhead $ 14 Selling costs (all variable) $ 8 The unit manufacturing overhead cost is based on a variable cost per unit of $10 and fixed costs of $80,000 (at full capacity of...

Homestead Jeans Co. has an annual plant capacity of 63,600 units, and current production is 42,300...

Homestead Jeans Co. has an annual plant capacity of 63,600 units, and current production is 42,300 units. Monthly fixed costs are $50,100, and variable costs are $30 per unit. The present selling price is $43 per unit. On November 12 of the current year, the company received an offer from Dawkins Company for 18,900 units of the product at $31 each. Dawkins Company will market the units in a foreign country under its own brand name. The additional business is...

Country Jeans Co. has an annual plant capacity of 65,100 units, and current production is 45,300...

Country Jeans Co. has an annual plant capacity of 65,100 units, and current production is 45,300 units. Monthly fixed costs are $40,600, and variable costs are $25 per unit. The present selling price is $33 per unit. On February 2 the company received an offer from Miller Company for 15,900 units of the product at $27 each. Miller Company will market the units in a foreign country under its own brand name. The additional business is not expected to affect...

Homestead Jeans Co. has an annual plant capacity of 65,500 units, and current production is 43,000...

Homestead Jeans Co. has an annual plant capacity of 65,500 units, and current production is 43,000 units. Monthly fixed costs are $38,000, and variable costs are $25 per unit. The present selling price is $37 per unit. On November 12 of the current year, the company received an offer from Dawkins Company for 13,600 units of the product at $27 each. Dawkins Company will market the units in a foreign country under its own brand name. The additional business is...

SampsonSampson Industries has an annual plant capacity of 71 comma 00071,000 ?units; current production is 60...

SampsonSampson Industries has an annual plant capacity of 71 comma 00071,000 ?units; current production is 60 comma 00060,000 units per year. At the current production? volume, the variable cost per unit is $ 35.00$35.00 and the fixed cost per unit is $ 3.90$3.90. The normal selling price of SampsonSampson?'s product is $ 47.00$47.00 per unit. SampsonSampson has been asked by DexterDexter Company to fill a special order for 7 comma 0007,000 units of the product at a special sales price...

QUESTION 42 Wheel Company makes a product, K9. It has a production capacity of 1,000 units,...

QUESTION 42 Wheel Company makes a product, K9. It has a production capacity of 1,000 units, and it can sell 900 units in the regular market. The regular selling price is $60 each. Wheel has received a request from Tom for a special order of 100 units of K9. This special order does not incur any variable selling cost. The following is the per-unit cost information: Variable manufacturing $18 Fixed manufacturing $20* Unit manufacturing cost $38 Variable selling $4 Fixed selling...

Question No. 1-1 The HASF Company has an annual plant capacity of 50,000 units. Predicted data...

Question No. 1-1 The HASF Company has an annual plant capacity of 50,000 units. Predicted data on sales and costs are given below. Sales (50 per unit) 1,000,000 Manufacturing cost Variable (material labor and overhead) 40 per unit Fixed overhead 30,000 Selling and administrative expenses Variable (sales commission RS 0.5 per unit) 2 per unit Fixed 7,000 A special order has been received from outside for 5,000 units at a selling price of 45 per...

Kobe Company manufactures a part for its production cycle. The costs per unit for 20,000 units...

Kobe Company manufactures a part for its production cycle. The costs per unit for 20,000 units of this part are as follows: Direct materials $15 Direct labor 12 Variable factory overhead 20 Unavoidable fixed factory overhead 18 Total cost $65 The Kobe Company has been approached by a supplier who claims it can sell Kobe Company 20,000 units of the same part for $940,000. Required: a. Assuming there is no alternative use for the facilities, how much money would Kobe...

Question