Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Decision on Accepting Additional Business Homestead Jeans Co has an annual plant capacity of 65,000 units, and current production is 45,000 units. Monthly foxed costs

image text in transcribed
image text in transcribed
Decision on Accepting Additional Business Homestead Jeans Co has an annual plant capacity of 65,000 units, and current production is 45,000 units. Monthly foxed costs are $54,000, and variable costs are 529 per unit. The present selling price is $42 per unit on November 12 of the current year, the company received an offer from Dawkins Company for 18,000 units of the product at $32 each. Dawions Company will market the units in a foreign country under its own brand name. The additional business is not expected to affect the domestic selling price or quantity of sales of Homestead Jeans Co. . Preparatlar dated November 12, on whether to select (Alternative 1} or accept (Alternative 2) the Dawkins order. If an amount is zero, entero", in required, use a minussion to indicate a loss Differential Analysis Reject Order (Alt. 1) or Accept Order (Alt. 2) November 12 Reject Accept Differential Order Order Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues Costs: Variable manufacturing costs Profit (Loss) Chuck My W Reject Order (Alt. 1) or Accept Order (Alt. 2) November 12 Reject Accept Differential Order Order Effects (Alternative 1) (Alternative 2) (Alternative 2) 0 Revenues Costs: Variable manufacturing costs Profit (Loss) o Feedback b. Having unused capacity available is relevant business will result in a net profit to this decision. The differential revenue is more than the differential cost. Thus, accepting this additional c. What is the minimum price per unit that would produce a positive contribution margin? Round your answer to two decimal places. Feedback

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

Clinical Audit In Physiotherapy From Theory Into Practice

Authors: Sue Barnard MSc MCSP, Gayle Hartigan

1st Edition

075063779X, 978-0750637794

More Books

Students also viewed these Accounting questions