Question
Kanada Inc. currently produces a product with the following cost characteristics: Selling price $85 Variable costs production 29 Variable costs selling and administrative 15 Total
Kanada Inc. currently produces a product with the following cost characteristics:
Selling price | $85 |
Variable costs production | 29 |
Variable costs selling and administrative | 15 |
Total fixed costs | $939301 |
Plant capacity | 41662 |
Current product/sales volume | 38464 |
Kanada Inc. can purchase additional capacity at a cost of $38101 in increments of 3043 units. A customer approaches AB Inc. for a special one-time order to purchase 9284 units. 71% of current variable selling and administrative costs would be incurred with this order.
Assuming Kanada Inc. would purchase additional capacity, what is the minimum acceptable per unit price for this order?
Select one:
a. $47.86
b. $52.21
c. $70.40
d. $39.65
Data for one of the Hawkins Company products is as follows: | |||
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| Maximum capacity | 107454 |
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| Current sales level | 66401 |
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| Selling price | $40 |
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| Variable production costs | 25 |
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| Variable selling costs | 4 |
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| Fixed costs | 404175 |
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The Hawkins Company has been offered a one-time special order for 21241 units at a price of $33. If the special order is accepted, 61% of the variable selling costs will be incurred for each unit of the special order. What is the incremental income to the Hawkins Company on the special order? |
Select one:
a. $336032
b. $387860
c. $118100
d. $256137
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