Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I have posted this question before and still have not got the right answer for requirement 2. Please help Green Grow Inc. (GGI) manufactures lawn
I have posted this question before and still have not got the right answer for requirement 2. Please help
Green Grow Inc. (GGI) manufactures lawn fertilizer. Because of the product's very high quality, Gol often receives special orders from agricultural research groups. For each type of fertilizer sold, each bag is carefully filled to have the precise mix of components advertised for that type of fertilizer. GGI's operating capacity is 36,000 one-hundred-pound bags per month, and it currently is selling 34,000 bags manufactured in 34 batches of 1,000 bags each. The firm just received a request for a special order of 9,000 one-hundred- pound bags of fertilizer for $210,000 from APAC, a research organization. The production costs would be the same, but there would be no variable selling costs. Delivery and other packaging and distribution services would cause a one-time $5,300 cost for GGI. The special order would be processed in two batches of 4,500 bags each. (No incremental batch-level costs are anticipated. Most of the batch-level costs in this case are short-term fixed costs, such as salaries and depreciation.) The following information is provided about GGI's current operations: Sales and production cost data for 34,000 bags, per bag: Sales price $ 45 Variable manufacturing costs Variable selling costs Fixed manufacturing costs Fixed marketing costs 15 No marketing costs would be associated with the special order. Because the order would be used in research and consistency is critical, APAC requires that GGI fill the entire order of 9,000 bags. Assume that the $20.00 fixed manufacturing overhead cost per unit consists of facility-level costs ($17.00/unit at the 34,000-unit output level), with the remainder being set-up-related i.e., batch-level) costs. Assume that the set-up related costs increase in total with the number of batches produced and that the facility-level fixed costs do not vary in total, either with the number of units produced or the number of batches produced during a period. Required: 1. What is the total fixed manufacturing overhead cost for the period? Break down (that is, decompose) this total cost into its component parts (i.e., batch-related overhead costs and facility-related fixed overhead costs). 2. Calculate the relevant unit and total cost of the special order, including the new information about batch-related costs. Assume, as before, the one-time delivery cost of $5,300. Complete this question by entering your answers in the tabs below. Required Required What is the total fixed manufacturing overhead cost for the period? Break down (that is, decompose) this total cost into its component parts (i.e., batch-related overhead costs and facility-related fixed overhead costs). (Round your answers to the nearest whole dollar amount.) Show less $ 102,000 578,000 Total batch-related overhead costs Facility-related overhead costs Total fixed manufacturing overhead cost $ 680,000 Complete this question by entering your answers in the tabs below. Required Required 1 2 Calculate the relevant unit and total cost of the special order, including the new information about batch-related costs. Assume, as before, the one-time delivery cost of $5,300. (Round the total cost to the nearest whole dollar amount and "per-unit relevant cost" to 2 decimal places.) Show less special orders in the Total relevant cost for the special order Total relevant special cost for the items in the special order TStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started