Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please show any work! Thank you Goshford Company produces a single product and has capacity to produce 135,000 units per month. Costs to produce its

image text in transcribedimage text in transcribedimage text in transcribed

Please show any work! Thank you

Goshford Company produces a single product and has capacity to produce 135,000 units per month. Costs to produce its current sales of 108,000 units follow. The regular selling price of the product is $124 per unit. Management is approached by a new customer who wants to purchase 27,000 units of the product for $78.30 per unit. If the order is accepted, there will be no additional fixed manufacturing overhead and no additional fixed selling and administrative expenses. The customer is not in the company's regular selling territory, so there will be a $7.20 per unit shipping expense in addition to the regular variable selling and administrative expenses. Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses Totals Per Unit $12.50 15.00 12.00 17.50 17.00 13.00 $87.00 Costs at 108,000 Units $1,350,000 1,620,000 1,296,000 1,890,000 1,836,000 1,404,000 $9,396,000 Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $78.30 per unit. Determine whether management should accept or reject the new business. Complete this question by entering your answers in the tabs below. Net Income Accept or Reject Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $78.30 per unit. Normal Volume Additional Volume Combined Total $ Costs and expenses: 0 0 0 0 0 0 0 0 0 0 Total costs and expenses Net income (loss) S 0 S 0 S 0 Net Income Accept or Reject Net Income Accept or Reject Determine whether management should accept or reject the new business. Determine whether management should accept or reject the new business.

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

Company Accounting

Authors: Ken Leo, John Hoggett, John Sweeting, Jennie Radford

8th Edition

0470819731, 978-0470819739

More Books

Students also viewed these Accounting questions