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please answer and i will upvote Problem 23-1A Analyzing income effects of additional business LO P7 Jones Products manufactures and sells to wholesalers approdimately 400.000
please answer and i will upvote
Problem 23-1A Analyzing income effects of additional business LO P7 Jones Products manufactures and sells to wholesalers approdimately 400.000 packages per year of underwater markers at $3.84 per package. Annual costs for the production and sale of this quantity are shown in the table Direct materials Direct labor Overhead Selling expenses Administrative expenses Total costs and expenses 512,000 128,000 384, eee 160,000 187,000 31, 291,00 A new wholesaler has offered to buy 67.000 packages for $347 each These markers would be marketed under the wholesaler's name and would not affect Jones Products's sales through its normai channels. A study of the costs of this additional business reveals the following Direct materials costs are 100% variable Per unit direct labor costs for the additional units would be 50% higher than normal because their production would require overtime pay at 1/2 times the usual labor rate. 30% of the normal annual overhead costs are fixed at any production levet from 350,000 to 500.000 units. The remaining 70% of the annual overhead costs are variable with volume. Accepting the new business would involve no additional seiting expenses Accepting the new business would increase administrative expenses by a $3,000 fored amount Required: Complete the three-column comparative Income statement that shows the following. (Round your Intermediate calculations and per unit cost answers to 3 decimals.) 1. Annual operating income without the special order 2. Annual operating Income received from the new business only 3. Combined annual operating income from normal business and the new business. Per Unit Amounts Normal New Business Volume Normal Volume Total New Business Combined Sales Variable costs 0.000 0.000 Fated costs Adinistrative expenses Total costs and expenses 107 one $1,291,000 A new wholesaler has offered to buy 67,000 packages for $3.47 each. These markers would be marketed under the wholesaler's name and would not affect Jones Products's sales through its normal channels. A study of the costs of this additional business reveal the following Direct materials costs are 100% variable . Per unt direct labor costs for the additional units would be 50% higher than normal because their production would require overtime pay at 1 times the usual labor rate. 30% of the normal annual overhead costs are foed at any production level from 350,000 to 500,000 units. The remaining 70% of the annual overhead costs are variable with volume Accepting the new business would involve no additional selling expenses. Accepting the new business would increase administrative expenses by a $2.000 feed amount Required: Complete the three column comparative Income statement that shows the follong (Round your Intermediate calculations and per unit cost answers to 3 decimals) 1. Annual operating income without the special order 2. Annual operating income received from the new business only 3. Combined annual operating income from normal business and the new business Petit Amet Normal New Business Volume Normal Volume New Business Combined Sales Variable costs 0000 0.000 Fodbo . Step by Step Solution
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