Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Jones Products manufactures and sells to wholesalers approximately 400.000 packages per year of underwater markers at $3.84 per package Annual costs for the production and

image text in transcribed
image text in transcribed
Jones Products manufactures and sells to wholesalers approximately 400.000 packages per year of underwater markers at $3.84 per package Annual costs for the production and sale of this quantity are shown in the table. Direct saterials Direct labor Overhead Selling expenses Administrative expenses Total costs and expenses 512,600 129,000 384, eee 160,000 107,000 $1,291,000 A new wholesaler has offered to buy 67000 packages for $3.39 each. These markers would be marketed under the wholesaler's name and would not affect Jones Products sales through its normal channels. A study of the costs of this additional business reveals the following Direct materials costs are 100% variable Per unit direct labor costs for the additional units would be 50% higher than normal because their production would require overtime pay at 15 times the usual labor rate 35% of the normal annual overhead costs are fwed at any production level from 350.000 to 500,000 units. The remaining 65% of the annual overhead cost is variable with volume Accepting the new business would involve no additional seling expenses. Accepting the new business would increase administrative expenses by a $4.000 fred amount Required: Complete the three-column comparative income statement that shows the following (Round your Intermediate calculations and per unit cost answers to 3 decimals) 1. Annual operating income without the special order 2. Annual operating income received from the new business only 3. Combined annual operating income from normal business and the new business Required: Complete the three-column comparative income statement that shows the following (Round your Intermediate calculations and per unit cost answers to 3 decimals) 1. Annual operating income without the speciat order. 2. Annual operating income received from the new business only. 3. Combined annual operating income from normal business and the new business. Peknit Amounts Normal New Business Volume Normal Volum New Business Combined Sales Variable costs Direct materials Direct labor Variable overhead 0.000 0.000 0 0 0 0 0 Total variable costs 0 Faxed costs Faced overhead Selling expenses Administrative expenses 0 0 0 0 Totalfoved costs Operating income 0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Accounting Fundamentals For Health Care Management

Authors: Steven A. Finkler, David M. Ward, Thad Calabrese

3rd Edition

1284124932, 9781284124934

More Books

Students also viewed these Accounting questions