Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Connected Limited produces cell phone chargers. The regular selling price is R400 per unit. The cost of goods sold amounts to R 290 and normal

Connected Limited produces cell phone chargers. The regular selling price is R400 per unit. The cost of goods sold amounts to R 290 and normal monthly production is 2 000 chargers. Average fixed manufacturing cost is R120 000 per month. Selling and administrative costs are fixed and amount to R30 000 per month. Connected Limited has just received a special order for 500 units at R320 per charger. This is a once of deal, and the regular selling price will not be affected if Connect accepts the order. Assuming Connected Limited has excess capacity, determine the effect on profits of accepting the order? A R45 000 increase. A R30 000 decrease

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Irregularities Frauds And The Necessity Of Technical Auditing In Construction Industry

Authors: A. L. M. Ameer

1st Edition

1481799754, 978-1481799751

More Books

Students also viewed these Accounting questions