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i need corect answer cuz the once on chegg that i saw was wrong. 5.50 Cost Analysis and Pricing The budget for the Oxford University
i need corect answer cuz the once on chegg that i saw was wrong.
5.50 Cost Analysis and Pricing The budget for the Oxford University Printing Company for 20X 1 follows: Sales 1,128,600 Direct material 295,000 Direct labor 340,000 Overhead 39.000 1,026,000 Net income 102,600 39,000 The company typically uses a so-called cost-plus pricing system. Direct-material and direct-labor costs are computed, overhead is added at a rate of 115% of direct labor costs, and 10% of the total cost is added to obtain the selling price. Edith Smythe, the sales manager, has placed a 23,000 bid on a particularly large order with a cost of 5,300 direct material and 6,200 direct labor. The customer informs her that she can have the business for 16,000, take it or leave it. If Smythe accepts the order, total sales for 20XI will be 1.144,600. Smythe refuses the order, saying, "I sell on a cost-plus basis. It is bad policy to accept orders at below cost. I would lose 2,630 on the job." The company's annual fixed overhead is 170,000. 1. What would operating income have been with the order? Without the order? Show your computations 2. Give a short description of a contribution-margin technique to pricing that Smythe might follow to achieve a price of 23,000 on the order Step by Step Solution
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