9-10

000 0.040.040 ao 33 0e27 0022 0018 0015 0.012 0010 0000 0043 0 833 0.008 0.023 0012 0015 8013 0010 0.008 0.0070.008 0.005 e 0.0 a024 0020 0010 0013 0010 0.000 0.007 0.0 0.00e 0004 am a 006 0,000 0.004 0.002 9. CoolAir Corporation manufactures portable window air conditioners. CoolAir has the capacity to manufacture and sell 80,000 air conditioners each year, but is currently only manufacturing and selling 60,000. The following per unit numbers relate to annual operations at 60,000 units: Selling price Manufacturing costs: Per Unit $125 Variable .. Fixed $25 $40 Selling and administrative costs: variable . Fixed... $10 $15 The city would like to purchase 3,000 air conditioners from CoolAir, but only if they can get them for $75 each. Variable selling and administrative costs on this special order will drop down to $2 per unit. This special order will not affect the 60,000 regular sales and it will not affect the total fixed costs. The annual financial advantage (disadvantage) for the company as a result of accepting this special order from the city should be: A) ($21,000) B) $24,000 C) $144,000 D) ($129,000) 10. A customer has requested that L Corporation fill a special order for 9,000 units of product S for $20.50 a unit. While the product would be modified slightly for the special order, product S's normal unit product cost is $14.40 Direct materials.3.10 Direct labor Variable manufacturing overhead Fixed manufacturing overhead. 1.50 6.40 3.40 $14.40 The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product S47 that would increase the variable costs by $5.00 per unit, and that would require an investment of $36,000 in special molds that would have no salvage value. This special order would have no effect on the compan's other sales. The company has ample spare capacity for producing the special order. The annual financial advantage (disadvantage) for the company as a result of accepting this special order should be: A) $(9,900) B) $4,500 C) $54,900 D) $(26,100)