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Chrome File Edit View History Bookm 5 Profiles Tab Window Help Wed Aug 9 <_ o v c problems x i plus.pearsonloom aulglllnem natural me lozy lompany manuracrures suppers and sells menu at a pair. variable manufacturing cost is pair allocated xed pain it has enough idle capacity available to accept one-time-only special order of pairs slippers cozy will not incur any marketing costs as result the orderl what would effect on operating income be if could accepted without affecting normal sales: increase or show your calculations manchester company manufactures part no for use in its production line per unit units follows: direct materials labour overhead fixed total g remnant offered sell no. make decision buy from there an overall savings least manchester. accepts offer eliminated furthermore determined that released facilities used save relevant manufacture achieve amount have saved by using which following: calculations. other factors might consider before outsourdng p qm ano->

Chrome File Edit Problems View History Bookmarks Profiles Tab Window Help C plus.pearson.com/products/ebfc6258-1d5b-471d-a1b4-e5bb756c87e0/pages/urn:pearson:entity:78be7227-b0bd-4f1e-bb96-ef8cca217a9d?iesCod... Wed Aug 9 5:33 PM Update SJ 0 x 1. 2. Assignment Material 1 ne cozy company manuractures snppers ana sens tnem at $1u a pair. Variable manufacturing cost is $5.75 a pair, and allocated fixed manufacturing cost is $1.75 a pair. It has enough idle capacity available to accept a one-time-only special order of 25,000 pairs of slippers at $7.50 a pair. Cozy will not incur any marketing costs as a result of the special order. What would the effect on operating income be if the special order could be accepted without affecting normal sales: (a) $0, (b) $43,750 increase, (c) $143,750 increase, or (d) $187,500 increase? Show your calculations. The Manchester Company manufactures Part No. 498 for use in its production line. The manufacturing cost per unit for 10,000 units of Part No. 498 is as follows: Direct materials Variable direct manufacturing labour Variable manufacturing overhead Fixed manufacturing overhead allocated Total manufacturing cost per unit $3 40 10 21 $74 The Remnant Company has offered to sell 10,000 units of Part No. 498 to Manchester for $71 per unit. Manchester will make the decision to buy the part from Remnant if there is an overall savings of at least $45,000 for Manchester. If Manchester accepts Remnant's offer, $11 per unit of the fixed overhead allocated would be eliminated. Furthermore, Manchester has determined that the released facilities could be used to save relevant costs in the manufacture of Part No. 575. For Manchester to achieve an overall savings of $45,000, the amount of relevant costs that would have to be saved by using the released facilities in the manufacture of Part No. 575 would be which of the following: (a) $30,000, (b) $115,000, (c) $125,000, or (d) $100,000? Show your calculations. What other factors might Manchester consider before outsourcing to Remnant? 457 0