Exercise 23-14 Accept new business or not LO P7 Goshford Company produces a single product and has capacity to produce 110.000 units per month Costs to produce its current sales of 88.000 units follow. The regular selling price of the product is $124 per unit Management is approached by a new customer who wants to purchase 22.000 units of the product for $8010 per unit. If the order is accepted, there will be no additional fixed manufacturing overhead and no additional fixed selling and administrative expenses. The customer is not in the company's regular selling territory, so there will be a $5.60 per unit shipping expense in addition to the regular variable selling and administrative expenses Direct materials Direct labor Variable manufacturing overhead Filed manufacturing overhead Variable selling and administrative expenses Fixed selling and winistrative expenses Totals Per Unit $12.50 15.00 13.00 17.50 17.00 14.00 589.00 Costs at 18,000 Units 51,100,000 1,320,000 1,144,000 1,500,000 1,495,000 $7,832,000 Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $80 10 per unit. Determine whether management should accept or reject the new business Complete this question by entering your answers in the tabs below. Net Income Acepto eject Calculate the combined totalt net income if the company accept the offer to sell additional units at the reduced price of $80.10 per unit Normal Volume Additional Vakume Combined Total Sotal costs and expenses er income pour) Goshford Company produces a single product and has capacity to produce 110.000 units per month Costs to produce its current sales of 88,000 units follow The regular selling price of the product is $124 per unit Management is approached by a new customer who wants to purchase 22.000 units of the product for $8010 per unit of the order is accepted, there will be no additional fixed manufacturing overhead and no additional fixed selling and administrative expenses. The customer is not in the company's regular selling territory, so there will be a $560 per unit shipping expense in addition to the regular Variable selling and administrative expenses Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses Totals Per Unit $12.50 15.00 13.00 17.50 17.00 14.00 $89.00 Costs at 88,000 Units $1,100,000 1,320,000 1,144,000 1,540,000 1,496,000 1.232,000 $7,832,000 Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $8010 per unit Determine whether management should accept or reject the new business Complete this question by entering your answers in the tabs below. Net Income Aco I Reje Determine whether management should accept or reject the new business Delene whether management should accept or reject the new business (Net Income Complete this question by entering your answers in the tabs below. Net Income Accept or Reject Calculate the combined total net income if the company accepts the offer to sell additional units at the re $80.10 per unit. Normal Volume Additional Volume Combined Total 0 Direct labor 0 0 0 Direct materials Fixed manufacturing overhead Fixed selling and admin. exp 0 0 Sales 0 O 0 0 Total costs and expenses Net income (loss) $ 0 $ o $ 0 Net Income Accept or Reject> Net Income Accept or Reject Calculate the combined total net income if the company accepts the offer to sell ad $80.10 per unit. Normal Volume Additional Volume Combined Total Fixed selling and admin. exp Sales Total costs and expenses Variable manufacturing overhead Variable selling and admin. exp C 0 0 0 0 Total costs and expenses Net income (loss) 0 $ $ $ 0 Accept or Reject>
