Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Jones Products manufactures and sells to wholesalers approximately 400,000 packages per year of underwater markers at $3.88 per package. Annual costs for the production and
Jones Products manufactures and sells to wholesalers approximately 400,000 packages per year of underwater markers at $3.88 per package. Annual costs for the production and sale of this quantity are shown in the table. Direct materials Selling expenses Administrative expenses Total costs and expenses $ 512, 128, 184, 164,000 107, $1,291, A new wholesaler has offered to buy 67,000 packages for $3.34 each. These markers would be marketed under the wholesaler's name and would not affect Jones Products's 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 times the usual laborate 25% of the normal annual overhead costs are fixed at any production level from 350,000 to 500,000 units. The remaining 75% of the annual Overhead costs are variable with volume, . Accepting the new business would involve no additional selling expenses. . Accepting the new business would increase administrative expenses by a $4,000 fixed amount Required: Complete the three column comparative income statement that shows the following (Round your intermediate calculations and per unit cost answers to 3 decimais.) 1. Annual operating income without the special order. 2. Annual operating income received from the new business only 2 manat incomo umalhuthani search (?) 3. Combined annual operating income from normal business and the new business. Total Per Unit Amounts Normal New Business Normal Volume New Business Volume Combined Sales Vanable costs
Step 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