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29 Required information [The following information applies to the questions displayed below.] Part 1 of 2 Helix Company is approached by a new customer to provide 1,680 units of its product at a special price of $6 per unit. The normal selling price of the product is $8 per unit. Helix is operating at 80% of its capacity of 10,900 units. No incremental fixed overhead will be incurred because order. Also, there will be no incremental fixed general and administrative costs because of this 8 03:24:33 order. dentify whether each of the following is relevant or not relevant to accepting this order. a. Special selling price of $6.00 per unit b. Direct materials of $1.00 per unit c. Direct labor of $2.00 per unit d. Variable overhead of $1.50 per unit e. Fixed overhead of $0.70 per unit f. Fixed general and administrative costs of $0.60 per unit 32 A company has already spent $5,400 to harvest tomatoes. The tomatoes can be sold as is for $97,200. Instead, the company could incur further processing costs of $51,800 and sell the resulting salsa for $136,100. (a) Prepare a sell as is or process further analysis of income effects. b ) Should the company sell as is or process further ? 8 03:31:45 (a) Sell or Process Analysis Sell as is Process Further Revenue Costs Income (b) The company should: 33 Rosa Company produced 1,325 defective phones due to a production error. The phones had cost $62,000 to produce. A salvage company will buy the defective phones as scrap for $50,350. It would cost Rosa $108,650 to ework the phones. If the phones are reworked, Rosa could sell them for $177,550 . a) Prepare a scrap or rework analysis of income effects (b) Should Rosa scrap or rework the LEE:EO (a) Scrap or Rework Analysis Scrap Rework Revenue from scrapped/reworked units Cost of reworked units Income (b) The company should: 34 segment of a company reports the following loss for the year. All $189,000 of its variable costs are avoidable, and $98,000 of its fixed costs are avoidable. Segment Income (Loss) Sales 270, 000 Variable costs 189 , 000 8 03:31:07 Contribution margin Fixed costs 81, 000 106, 000 Income (loss) (25,000) (a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be eliminated? Complete this question by entering your answers in the tabs below. Required A Required B Compute the income increase or decrease from eliminating this segment Segment Elimination Analysis Continue Eliminate Income Increase (Decrease) Sales 270,000 Variable costs 189,000 Contribution margin 81,000 Fixed costs 106,000 Income ( loss ) (25,000)
