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assistance needed .thanks Anchor Company manufactures a variety of tool boxes. The fitm is currently operating at 80% of its full capacity of 4.500 machinehours
assistance needed .thanks
Anchor Company manufactures a variety of tool boxes. The fitm is currently operating at 80% of its full capacity of 4.500 machinehours per month. Each unit requires 30 minutes of machine time. its sales manager has been looking for special orders to make productive use of the excess capacity. JCL Ltd., a potential customer, has offered to buy 10.000 tool boxes at $7.90 per box, provided that the entire quantity is delivered in two months. The current per-box cost data are as follows Both fixed and variable overhead are allocated using direct labour-hours as a base. Variable overhead is $1.60 per direct labour-hour. Without the order, Anchor would have enough business to operate at 3,600 direct labour-hours in each of the next two months. The regular setling price of the tool boxes is $10.90. A sales commission of 50 cents per unit is paid to sales representatives on all regular saies. No additional selling or administrative expenses are anticipated on account of accepting this special order and no commissions will be paid on this special ordet. The production managet is concerned about the labour time that 10,000 boxes would require. She cannot schedule overtime because Anchor has a policy against it. JCL will not accept fewer than 10,000 tool boxes. Therefore, In order to fill the special order, it would be necessary for Anchor Company to divert some of its regular sales to the special order. Required: 1-a. Prepare contribution margin income statements for the two-month period both with and without the special order. (Leave no cells blank - be certain to enter "O" wherever required.) Required: 1-a. Prepare contribution margin income statements for the two-month period both with and without the special order. (Leave no cells biank - be certain to enter "O" wherever required.) Step by Step Solution
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