Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

need help with second question with steps Beatch Taylor operates a small machine shop. He manufactures one standard product that is also available from many

image text in transcribedimage text in transcribed

need help with second question with steps

image text in transcribedimage text in transcribedimage text in transcribed
Beatch Taylor operates a small machine shop. He manufactures one standard product that is also available from many other similar businesses, and he also manufactures deluxe products to order. His accountant prepared the following annual income statement: Deluxe Sales Standard Sales Total Sales $55.000 $27.500 $82.500 Costs Material 11,000 8.800 19.800 Labour 22,000 9.900 31,900 Depreciation 6.930 3.960 10.890 Power 770 440 1,210 Rent 6.600 1,100 7,700 Heat and light 660 110 770 Other 440 990 1,430 Total costs 48.400 25.300 73.700 Net income $6.600 $2.200 $8,800 The depreciation charges are for machines used in the product lines. The power charge is apportioned based on an estimate of the power consumed by each line. The rent is for the building space, which has been leased for 10 years at $7,700 per year. The rent and the heat and light costs are apportioned to the product lines based on the amount of floor space occupied by each line. All other costs are current expenses that are identified with the product line causing them. A valued customer has asked Mr. Taylor if he would manufacture 5.500 of the deluxe products for him. Mr. Taylor is working at capacity and would have to give up some other business in order to take this order. He cannot cancel deluxe orders he has already agreed to, so he would have to reduce the output of his standard product by about one-half for a year while producing the requested deluxe product. The customer is willing to pay $7.00 for each unit. The material cost will be about $2.00 per unit and the labour will be $3.60 per unit. Mr. Taylor will have to spend $2,200 for a special device that will be discarded when the job is done.(a) Your answer is correct Calculate the incremental cost of the order. Incremental cost of the order 33000(b) Calculate the full cost of the order. Full cost of the order $

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

Introduction to Managerial Accounting

Authors: Peter C. Brewer, Ray H Garrison, Eric Noreen, Suresh Kalagnanam, Ganesh Vaidyanathan

4th Canadian edition

978-1259103261

More Books

Students also viewed these Accounting questions

Question

FDM is similar to WDM . True False

Answered: 1 week ago

Question

What does this look like?

Answered: 1 week ago