Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Goshford Company produces a single product and has capacity to produce 165,000 units per month Costs to produce its current sales of 132.000 units follow.

image text in transcribed
image text in transcribed
Goshford Company produces a single product and has capacity to produce 165,000 units per month Costs to produce its current sales of 132.000 units follow. The regular selling price of the product is $136 per unit Management is approached by a new customer who wants to purchase 33,000 units of the product for $77.40 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 $5.40 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.se 35.00 13.00 12.50 14.00 14.00 $86.00 Costs at 132,000 units $1,650,000 1,980,000 1,716,000 2,310,000 1,848,000 1,848,000 $11, 352,000 Calculate the combined totat net income if the company accepts the offer to sell adetitional units at the reduced price of $77.40 per unit Normal Volume Additional Combined Volume Total $2,554,200 $ 2,554 200 Sales Costs and expenses Direct materials retish 1,650,000 2,062,500 412,500 40 l 476 Prev 1 of 4 Hi Next > Fixed selling and administrative expenses Totals 14.00 $86.00 1,848,000 $ 11,352,000 Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $77.40 per unit Normal Volume Additional Combined Volume Total $ 2,554,200 $ 2,554,200 Sales Costs and expenses: Direct materials Direct labor Variable selling and admin, exp Fixed overhead Variable overhead 1,650,000 412,500 2,062,500 1,980,000 495,000 2,475,000 1,848,000 1,848,000 2,310,000 2,310,000 0 0 0 0 0 7,788,000 907,500 8,695,500 (7,788,000) $ 1,646,700 $ (6,141,300) Fixed selling and admin, exp Total costs and expenses Net income (loss) $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Contemporary Engineering Economics

Authors: Chan S. Park

5th edition

136118488, 978-8120342095, 8120342097, 978-0136118480

Students also viewed these Accounting questions