Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Pardo Company produces a single product and has capacity to produce 180,000 units per month. Costs to produce its current monthly sales of 144,000

image text in transcribed

Pardo Company produces a single product and has capacity to produce 180,000 units per month. Costs to produce its current monthly sales of 144,000 units follow. The normal selling price of the product is $136 per unit. A new customer offers to purchase 36,000 units for $65.70 per unit. If the special offer is accepted, there will be no additional fixed overhead and no additional fixed general and administrative costs. The special offer would not affect its normal sales. Costs at 144,000 Units: Direct materials Direct labor Variable overhead Fixed overhead Fixed general and administrative Totals (a) Compute the Income from the special offer. Per Unit $12.50 $ 1,800,000 15.00 14.00 17.50 2,160,000 2,016,000 2,520,000 14.00 2,016,000 $ 73.00 $ 10,512,000 (b) Should the company accept the special offer? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B Compute the income for the special offer. (Round your "Per Unit" answers to 2 decimal places.). SPECIAL OFFER ANALYSIS Sales Variable costs Direct materials Direct labor Variable overhead Contribution margin Fixed costs Per Unit Total $ 65.70 $ 1,800,000 6 12.50 1,800,000 15.00 2,160,000 14.00 2,016,000 24.20 (4,176,000) 000 Fixed overhead Fixed general and administrative 24.20 S (4,176,000) Income

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 Business Reporting For Decision Making

Authors: Jacqueline Birt, Keryn Chalmers, Albie Brooks, Suzanne Byrne, Judy Oliver

4th Edition

978-0730302414, 0730302415

More Books

Students also viewed these Accounting questions

Question

Explain an integrated workforce planning framework? L01

Answered: 1 week ago