Question
1a. Gleam Clean cleans and waxes floors for commercial customers. The company is presently operating at less than capacity with equipment and employees idle at
1a.
Gleam Clean cleans and waxes floors for commercial customers. The company is presently operating at less than capacity with equipment and employees idle at times. The company recently received an order from a potential customer outside the company's normal geographic service region for a price of $28,000. The size of the proposed job is 41,000 square feet. The company's normal service costs are as follows:
Unit-level materials | $0.37 per square foot |
Unit-level labor | $0.44 per square foot |
Unit-level variable overhead | $0.27 per square foot |
Facility-level overhead | Allocated at $0.29 per square foot |
If the company accepts the special offer:
The company will earn $12,830 on the job.
The company will lose $16,280 on the job.
The company will lose $5,210 on the job.
The company will lose $28,170 on the job.
1b.
The Clear Music Company produces and sells a desktop speaker for $280. The company has the capacity to produce 68,000 speakers each period. At capacity, the costs assigned to each unit are as follows:
Unit level costs | $135 |
Product level costs | $33 |
Facility level costs | $23 |
The company has received a special order for 19,000 speakers. If this order is accepted, the company will have to spend $28,000 on additional costs. Assuming that no sales to regular customers will be lost if the order is accepted, at what selling price will the company be indifferent between accepting and rejecting the special order? (Do not round your intermediate calculations. Round your final answer to two decimal places.)
$143.97
$186.47
$136.47
$146.97
1c.
The Clear Music Company produces and sells a desktop speaker for $280. The company has the capacity to produce 68,000 speakers each period. At capacity, the costs assigned to each unit are as follows:
Unit level costs | $135 |
Product level costs | $33 |
Facility level costs | $23 |
The company has received a special order for 19,000 speakers. If this order is accepted, the company will have to spend $28,000 on additional costs. Assuming that no sales to regular customers will be lost if the order is accepted, at what selling price will the company be indifferent between accepting and rejecting the special order? (Do not round your intermediate calculations. Round your final answer to two decimal places.)
$143.97
$186.47
$136.47
$146.97
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