Question
Grudge Match Inc. produces boxing gloves which it normally sells for $7 each. The cost of manufacturing 20,000 boxing gloves is: Per unit Materials $10,000
Grudge Match Inc. produces boxing gloves which it normally sells for $7 each.
The cost of manufacturing 20,000 boxing gloves is:
| Per unit | ||
| Materials | $10,000 | $0.50 |
| Labour | 30,000 | 1.50 |
| Variable overhead | 20,000 | 1.00 |
| Fixed overhead | 40,000 | |
| Total | $100,000 |
On-Top-Of-The-World Ltd. Offers Grudge Match Inc. $4.80 per gloves for 5,000 boxing gloves.
If Grudge Match Inc. accepts the offer, its fixed overhead will increase from $40,000 to $46,000 due to the purchase of a new machine.
What is the Incremental Fixed costs from this Special Order?
What is the Incremental Conversion costs from this Special Order?
What is the overall Increase/(Decrease) in Incremental Income from this Special Order?
What is the incremental Revenue from this Special Order?
What is the Total Incremental Expenses from this Special Order?
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Accounting Information Systems
Authors: George H Bodnar, William S Hopwood
10th Edition
013609712X, 978-0136097129
