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answer as soon as possible plzzz Anchor Company manufactures a variety of tool boxes. The firm is currently operating at 80% of its full capacity
answer as soon as possible plzzz
Anchor Company manufactures a variety of tool boxes. The firm is currently operating at 80% of its full capacity of 5,800 m hours per month. Each unit requires 30 minutes of machine time. Its sales manager has been looking for special orders to productive use of the excess capacity. JCL Ltd., a potential customer, has offered to buy 10,000 tool boxes at $15.10 per bo that the entire quantity is delivered in two months. The current per-box cost data are as follows: Direct materials Direct labour (% hour at $13.60/hour) Total manufacturing overhead Total unit product cost $ 4.40 6.80 3.90 $15.10 Both fixed and variable overhead are allocated using direct labour-hours as a base. Variable overhead is $3.40 per direct I Without the order, Anchor would have enough business to operate at 4,640 direct labour-hours in each of the next two mo regular selling price of the tool boxes is $18.10. A sales commission of 50 cents per unit is paid to sales representatives on sales. No additional selling or administrative expenses are anticipated on account of accepting this special order and no commis: paid on this special order. The production manager is concerned about the labour time that 10,000 boxes would require. She cannot schedule overtir Anchor has a policy against it. JCL will not accept fewer than 10,000 tool boxes. Therefore, in order to fill the special order, necessary for Anchor Company to divert some of its regular sales to the special order. Cosung Saved a factures a variety of tool boxes. The firm is currently operating at 80% of its full capacity of 5,800 machine- unit requires 30 minutes of machine time. Its sales manager has been looking for special orders to make xcess capacity. JCL Ltd., a potential customer, has offered to buy 10,000 tool boxes at $15.10 per box, provided is delivered in two months. The current per-box cost data are as follows: - at $13.60/hour) overhead $ 4.40 6.80 3.90 $15.10 ost overhead are allocated using direct labour-hours as a base. Variable overhead is $3.40 per direct labour-hour. or would have enough business to operate at 4,640 direct labour-hours in each of the next two months. The the tool boxes is $18.10. A sales commission of 50 cents per unit is paid to sales representatives on all regular rials ur (% hour at $13.60/hour) Facturing overhead product cost $ 4.40 6.80 3.90 $15.10 nd variable overhead are allocated using direct labour-hours as a base. Variable overhead is $3.40 per direct labour-hour. order, Anchor would have enough business to operate at 4,640 direct labour-hours in each of the next two months. The ng price of the tool boxes is $18.10. A sales commission of 50 cents per unit is paid to sales representatives on all regular al selling or administrative expenses are anticipated on account of accepting this special order and no commissions will be s special order. ction manager is concerned about the labour time that 10,000 boxes would require. She cannot schedule overtime because sa policy against it. JCL will not accept fewer than 10,000 tool boxes. Therefore, in order to fill the special order, it would be for Anchor Company to divert some of its regular sales to the special order. re contribution margin income statements for the two-month perlod both with and without the special order. (Leave no cells e certain to enter "O" wherever required.) ANCHOR COMPANY Contribution Margin Income Statement Without Special Order With Special Order Total sales revenue Less. variable costs Less: fixed costs 1-b. Based on financial considerations, should Anchor accept the order? O Accept O Not AcceptStep by Step Solution
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