Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Part 3 Marshall's Electronics, Inc., sells high quality oversized printers for making blueprints. It manufactures two printers, the BP041 and the XBP400, for which the

image text in transcribed
Part 3 Marshall's Electronics, Inc., sells high quality oversized printers for making blueprints. It manufactures two printers, the BP041 and the XBP400, for which the following information is available: Costs per unit Direct materials BP041 XBP400 $450 $ 550 Direct labor 600 750 Variable overhead. 750 900 Fixed overhead 600 750 Total cost per unit $2,400 $2.950 Price $3,000 $3,900 Units sold 400 200 The average wage rate is $20 per hour. The plant has a capacity of 21,000 direct labor hours, but current production uses only 19,500 direct labor hours. Required: a. A new customer has offered to buy 40 units of XBP400 if the price is lowered to $3,000 per unit. How many direct labor-hours are required to produce 40 units of XBP? How much will the profit increase or decrease if Marshall's accepts this proposal? All other prices will remain the same. b. Suppose that the customer has offered instead to buy 60 units of XBP400 at $3,000 per unit. How much will the profits change if the order is accepted? Assume that the company cannot increase its production capacity to meet the extra demand. c. Answer the question in requirement (b), assuming instead that the plant can work. overtime. Direct labor costs for the overtime production increase to $30 per hour. Variable overhead costs for overtime production are 50% more than for normal production

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

Not For Profit Audit Committee Best Practices

Authors: Warren Ruppel

1st Edition

0471697419, 978-0471697411

More Books

Students also viewed these Accounting questions