Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Julison Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of

image text in transcribed
image text in transcribed
image text in transcribed
Julison Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 60,000 units per month is as follows: $34.00 Direct materials Direct labor Variable manufacturing overhead $4.00 $ 2.00 $ 21.30 Fixed manufacturing overhead Variable selling & administrative expense $ 2.70 Fixed selling & administrative expense $ 7.00 The normal selling price of the product is $79.80 per unit. An order has been received from an overseas customer for 2,000 units to be delivered this month at a special discounted price. This order would not change the total amount of the company's fixed costs. The variable selling and administrative expense would be $0.30 less per unit on this order than on normal sales. (Scenario A) Suppose the company has normal sales of 50,000 units and there is ample idle capacity to produce the units required by the overseas customer. The special discounted price on the special order is $71.60 per unit. (Scenario A) Suppose the company has normal sales of 50,000 units and there is ample idle capacity to produce the units required by the overseas customer. The special discounted price on the special order is $71.60 per unit. In Scenario A, what is the relevant cost per unit for this special order? In other words, what incremental cost per unit does the company have to occur if accepting the special order? $42.2 $63.7 $70.7 $42.7 ose deres, the company's In Scenario A, By how much would this special order increase (decrease) the company's net operating income for the month? Increase the company's net operating income by $1,800 Decrease the company's net operating income by $16,400 Increase the company's net operating income by $58,400 Increase the company's net operating income by $57,800 Question 34 4 pts [bonus] (Scenario B) Suppose the company has normal sales of 58,800 units when the special order is received from the overseas customer. This means that there is not enough idle capacity to produce all of the units for the overseas customer and accepting the special order would require cutting back on production of 800 units for regular customers. What would be the minimum acceptable price per unit for the special order? $37.10 $42.4 $42.70 $57.24

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 Information For Decisions

Authors: Robert Ingram, Thomas L. Albright, Bruce A. Baldwin, John Hill

1st Edition

0538815388, 978-0538815383

More Books

Students also viewed these Accounting questions