Answered step by step
Verified Expert Solution
Question
1 Approved Answer
At Cullumber Electronics, it costs $29 per unit ($20 variable and $9 fixed) to make an MP3 player that normally sells for $44. A foreign
At Cullumber Electronics, it costs $29 per unit ($20 variable and $9 fixed) to make an MP3 player that normally sells for $44. A foreign wholesaler offers to buy 3,020 units at $24 each. Cullumber Electronics will incur special shipping costs of $2 per unit. Assuming that Cullumber Electronics has excess operating capacity, indicate the net income (loss) Cullumber Electronics would realize by accepting the special order. (Enter negative amounts using either a negative sign preceding the numbereg-45 or parentheses es: (451) Reject Order Accept Order Net Income Increase (Decrease) Revenues $ $ Costs --Variable manufacturing Shipping Net income $ $ $ The special order should be Wildhorse Industries incurs unit costs of $ 7($ 4 variable and $ 3 fixed) in making an assembly part for its finished product. A supplier offers to make 13,400 of the assembly part at $ 6 per unit. If the offer is accepted, Wildhorse will save all variable costs but no fixed costs. Prepare an analysis showing the total cost saving, if any, that Wildhorse will realize by buying the part. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg(45) Make Buy Net Income Increase (Decrease) Variable manufacturing costs $ Fixed manufacturing costs Purchase price Total annual cost The decision should be to the part
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started