Minnie's Soup plant is running at 52% of its monthly capacity. Minnie's Soup plant has just...
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Minnie's Soup plant is running at 52% of its monthly capacity. Minnie's Soup plant has just received a special order to produce 400 cases of creamy potato soup for a statewide supermarket. The supermarket will sell the soup under its own private brand label. The soup will be the same in all respects, except for the label, which will cost Minnie's Soup plant an extra $500 in total to design. The supermarket has offered to pay only $19.00 per case, which is well under Minnie's normal sales price. Costs at the current production level (450 cases) are as follows: Manufacturing Costs Direct materials Direct labor Variable MOH Fixed MOH Total Total Cost Cost per Case $4,500 $10.00 1,350 3.00 900 2.00 2,700 6.00 $9,450 $21.00 If Minnie's Soup plant accepts the offer, profits will: Minnie's Soup plant is running at 52% of its monthly capacity. Minnie's Soup plant has just received a special order to produce 400 cases of creamy potato soup for a statewide supermarket. The supermarket will sell the soup under its own private brand label. The soup will be the same in all respects, except for the label, which will cost Minnie's Soup plant an extra $500 in total to design. The supermarket has offered to pay only $19.00 per case, which is well under Minnie's normal sales price. Costs at the current production level (450 cases) are as follows: Manufacturing Costs Direct materials Direct labor Variable MOH Fixed MOH Total Total Cost Cost per Case $4,500 $10.00 1,350 3.00 900 2.00 2,700 6.00 $9,450 $21.00 If Minnie's Soup plant accepts the offer, profits will:
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To determine the profit if Minnies Soup plant accepts the offer we need to calculate the total cost ... View the full answer
Related Book For
Cost Accounting A Managerial Emphasis
ISBN: 978-0133392883
6th Canadian edition
Authors: Horngren, Srikant Datar, George Foster, Madhav Rajan, Christ
Posted Date:
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