Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

P8-55B (similar to) Question Help Summer Fun manufactures flotation vests in Tampa, Florida Summer Fun's contribution margin income statement for the most recent month contains

image text in transcribed
P8-55B (similar to) Question Help Summer Fun manufactures flotation vests in Tampa, Florida Summer Fun's contribution margin income statement for the most recent month contains the following data: Click the loon to view the cost information) Suppose Boats-n-More Cruisines wants to buy 5.000 vests from Summer Fun Acceptance of the order will not increase Summer Fun's variable marketing and administrative expenses or any of its fixed expenses The Summer Fun plant has enough unused capacity to manufacture the additional vests Boats -n-More Cruiselines has offered $6 per vest, which is below the normal sale price of $15. Read the requirements 0 Data Table Requirement 1. Prepare an incremental analysis to determine whether Summer Fun should accept this special sales orde contribution margin and/or a decrease in operating income from the special order.) Total Order (5,000 units) Per Unit Summer Fun Contribution Margin Income Statement (Variable Costing) For Sales Volume of 33,000 Units Total $ 495.000 Incremental Analysis of Special Sales Order Decision Revenue from special order Less variable expense associated with the order: Variable manufacturing costs Contribution margin Less: Additional fixed expenses associated with the order Increase (decrease) Requirements 90,000 110.000 Sales revenue Less variable expenses Variable manufacturing costs (DM, DL, Variable MOH) Variable operating expenses (selling and administrative) Contribution margin Les fed expenses: Fixed manufacturing overhead Fixed operating expenses (selling and administrative) Operating income (os) 286,000 Enter any number in 122,000 95.000 1. Prepare an incremental analysis to determine whether Summer Fun should accept this special sales order, 2. Identify long-term factors Summer Fun should consider in deciding whether to accept the special sales order $ 69.000 parts 2 remaining

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_2

Step: 3

blur-text-image_3

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

Auditors Guide To IT Auditing

Authors: Richard E. Cascarino

2nd Edition

1118147618, 978-1118147610

More Books

Students also viewed these Accounting questions

Question

Presentation Aids Practicing Your Speech?

Answered: 1 week ago

Question

Effective Delivery Effective

Answered: 1 week ago