Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please help Jones Products manufactures and sells to wholesalers approximately 500,000 packages per year of underwater markers at $3.86 per package. Annual costs for the
please help
Jones Products manufactures and sells to wholesalers approximately 500,000 packages per year of underwater markers at $3.86 per package. Annual costs for the production and sale of this quantity are shown in the table. $ 500.000 480.000 Direct materia Director Overhead Seling expenses Administrative expenses Total costs and export 133.000 $1615.000 A new wholesaler has offered to buy 83,000 packages for $3.44 each. These markers would be marketed under the wholesaler's name and would not affect Jones Products' sales through its normal 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% times the usual labor rate. 20% of the normal annual overhead costs are fixed at any production level from 450,000 to 600.000 units. The remaining 80% of the annual overhead cost is 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 fixed amount Required: Complete the three-column comparative come 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. Combined annual operating income from normal business and the new business. 3. Answer is not complete. Per Unt Amount Normal New Normal Volume Volume Business Combined MOS 3.44 $ 1.800.000 285.5205 2.215.520 Sales Variable costs Direct materials Director Variable overhead Total variable costs Contribution margin 105240 2.540 63.744 OOOOO 1.250 020 0.768 2368 1492 1.200 0.480 0.76 640.000 160,000 354.000 746.240 190340 447.744 1,393.824 2.787 648 (572.126 1.114.000 T.000 0.912 75.006 Fored costs Fred overhead 90.000 95.000 133.000 200,000 2.000 Selling expenses OOOO 135.000 200.000 O 431 000 390.69 Totaldo Operating income 429,000 $317.000 2.000 73.00 Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started