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1. The Fresno Company manufactures slippers and sells them at $13 a pair Variable manufacturing cost is $6.50 a pair, and allocated fixed manufacturing cost
1. The Fresno Company manufactures slippers and sells them at $13 a pair Variable manufacturing cost is $6.50 a pair, and allocated fixed manufacturing cost is $2.00 a pair. It has enough idle capacity available K to accept a one-time-only special order of 5,000 pairs of slippers at $8.50 a pair. Fresno will not incur any marketing costs as a result of the special order. What would the effect on operating income be if the special order could be accepted without affecting normal sales: (a) $0, (b) $10,000 increase, (c) $32,500 increase, or (d) $42,500 increase? Show your calculations 2. The Portland Company manufactures Part No. 498 for use in its production line. The manufacturing cost per unit for 20,000 units of Part No. 498 is as follows. (Click to see the manufacturing cost per unit.) Read part 2's requirement 1. The Fresno Company manufactures slippers and sells them at $13 a pair Variable manufacturing cost is $6.50 a pair, and allocated fixed manufacturing cost is $2.00 a pair. It has enough idle capacity available to accept a one-time-only special order of 5,000 pairs of slippers at $8.50 a pair Fresno will not incur any marketing costs as a result of the special order What would the effect on operating income be if the special order could be accepted without affecting normal sales: (a) $0, (b) $10,000 increase, (c) $32,500 increase, or (d) $42,500 increase? Show your calculations. Begin by selecting the labels to calculate the effect on operating income and then enter in the supporting calculations. Special order price per unit S Variable manufacturing cost per unit Contribution margin per unit x units in special order Effect on operating income What would the effect on operating income be if the special order could be accepted without affecting normal sales? OA. SO B. $10,000 increase OC. $32,500 increase $ 8.50 6.50 *** 2.00 5,000
Can you please help me solve requirement number 2.
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