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Andreasen Corporation manufactures thermostats for office buildings. The following is the cost of each unit: Materials Labor Variable overhead Fixed overhead ($1,058,400 per year, 108,000
Andreasen Corporation manufactures thermostats for office buildings. The following is the cost of each unit: Materials Labor Variable overhead Fixed overhead ($1,058,400 per year, 108,000 units per year) Total $18.80 7.80 2.80 9.80 $39.20 Simpson Company has approached Andreasen with an offer to buy 6,000 thermostats at a price of $38 each. The regi affecting its current production of 108,000 units. Simpson requires that each unit use its branding, which requires a mo affixing the label will be the same as for the current models. The Simpson order will also require a one-time rental of pa Required: a. Prepare a schedule to show the impact of filling the Simpson order on Andreasen's profits for the year. (Enter you 5,400.4). Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) (All Costs in Thousands of Dollars) Status Quo 108,000 Units Alternative 114,000 Units Difference Sales revenue Less variable costs: Materials Labor Variable overhead Total variable cost Contribution margin Less: Fixed costs Operating profit(loss) b. Do you agree with the decision to accept the special order? No Andreasen Corporation manufactures thermostats for office buildings. The following is the cost of each unit: Materials Labor Variable overhead Fixed overhead ($1,058,400 per year, 108,000 units per year) Total $18.80 7.80 2.80 9.80 $39.20 Simpson Company has approached Andreasen with an offer to buy 6,000 thermostats at a price of $38 each. The regi affecting its current production of 108,000 units. Simpson requires that each unit use its branding, which requires a mo affixing the label will be the same as for the current models. The Simpson order will also require a one-time rental of pa Required: a. Prepare a schedule to show the impact of filling the Simpson order on Andreasen's profits for the year. (Enter you 5,400.4). Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) (All Costs in Thousands of Dollars) Status Quo 108,000 Units Alternative 114,000 Units Difference Sales revenue Less variable costs: Materials Labor Variable overhead Total variable cost Contribution margin Less: Fixed costs Operating profit(loss) b. Do you agree with the decision to accept the special order? No
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