Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Dec c Ine. manufactures radios at an anmual production level of s0,000 units. At this production level, the per unit for a radio is as

image text in transcribed
Dec c Ine. manufactures radios at an anmual production level of s0,000 units. At this production level, the per unit for a radio is as follows Diroct materials t labor Fixed manufacturing overhead 56.6 15915| An outside supplier has offered to sell the radios to Dipuisto Inc. for $26.20 per unit. If Dipuisto Inc., accepts this offer, then they will not nced to employ the supervisor. Also, if the radios are purchased froen the outside 40% of the fixed manufacturing overhead costs can be eliminated. Assuming that there are no space that Dipaisto uses to manufacture the radios, what is the annual impact to the company's profit r other uses for the buys the radios from the supplier instead of manufacturing them? a. Profit would decrease by $84,500 b. Profit would increase by $84,500 Profit would decrease by $190,000 Profit would increase by $190,000 c. d. 16. Marjess Corp. manufactures shirts, and it is considering whether or not it should accept a special order for 5,000 shirts. The normal selling price of a shirt is $45 and its unit product cost is $36 as shown below Direct materials 16.00 Manufactaring overbead $12.00 Unit product cost $36.00 Most of the manufacturing overhead is fixed; however, 30% of it is variable with respect to the number of shirts produced. The special order will require customizing the shirts for the customer with an additional direct materials cost of $5 per shirt and an additional direct labor cost of $4 per shirt. If it accepts this order, Marjess will have to rent special equipment to handle the shirt customization at a cost of $22,000. The order would have no effect on Marjess Corporation's regular sales and it could be fulfilled using the company's existing capacity without affecting any other order What is the minimum (ie,the break-even) sales price per unit that Marjess should charge for this special order? a. $17.00 b. $49.40 . $32.00 d. $41.00

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

Intermediate Accounting Volume 2

Authors: Thomas Beechy, Joan Conrod, Elizabeth Farrell, Ingrid McLeod-Dick

7th Edition

1259108023, 9781259108020

More Books

Students also viewed these Accounting questions

Question

1. Arouse curiosity with questions such as What would happen if?

Answered: 1 week ago