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Newbury Printers operates a printing press with a monthly capacity of 3.200 machine-hours. Newbury has two main customers: Scott Corporation and Kimberly Corporation. Data on
Newbury Printers operates a printing press with a monthly capacity of 3.200 machine-hours. Newbury has two main customers: Scott Corporation and Kimberly Corporation. Data on each customer for January are: (Click to view the data.) (Click the icon to view the special order infomation.) Read the requirements. Begin by calculating the amount that should be used to determine the allocation. Scott Corporation Kimberly Corporation Choose from any list or enter any number in the input fields and then click Check Answer. ? parts Clear All Check Answer remaining Requirements What action should Newbury take to maximize its operating income? Show your calculations. What other factors should Newbury consider before making decision? Data Table 1 Scott Corporation Total Kimberly Corporation 112,000 $ Revenues 168,000 $ 280,000 57,600 64,000 121,600 Variable costs Contribution margin 110,400 48,000 158,400 90,000 60,000 150,000 Fixed costs (allocated) 20,400 $ (12,000) $ 8,400 Operating income Machine-hours required 2,400 hours 800 hours 3,200 hours i More Info Kimberly Corporation indicates that it wants Newbury to do an additional $112,000 worth of printing jobs during February. These jobs business Newbury did for Kimberly in January in terms of variable costs and machine-hours required. Newbury anticipates that the business from Scott Corporation in February will be the same as that in January. Newbury can choose to accept as much of the Scott and Kimberly business for February as its capacity allows. Assume that total machine-hours and fixed costs for February will be the same as in January. are identical to the existing
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