Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Proctoring Enobled. MH Lat 3: Aelevint Costing (i) 11 Anchor Company manutactures a varioty of tool boxes. The firm is currenty operating of 80% of

image text in transcribed
image text in transcribed
Proctoring Enobled. MH Lat 3: Aelevint Costing (i) 11 Anchor Company manutactures a varioty of tool boxes. The firm is currenty operating of 80% of its full capacity of 6.300machine hours per month. Each unit requires 30 minutes of machine time ias sales manoger has been looking for speciol orders to make productive use of the excess capacty. JCL ttd, a potertiol customec, has offered to buy 10,000 tool boxes at $12.70 per box, provided that the eatire quantity is dellvered in two months. The current per-box cost dota tore as follows: Both fived and variable overhesd are allocated using drect labour hours as a base. Variable ovethead is $2.80 per direct labout hour. Wishout the ordor, Anchor woud have enough bushors to operate at 5.040 direct labour hours in each of the next two months. The regular seling price of the tool bowes is $1570. A soles commission of 50 cents per unit is paid to saies representatives on all regular. saies. No additional selling of administrative expenses are anticipoted on account of accepting this special order and no commisuions wir be paid on this special order. The production managet is concerned about the labour time that 10.000 boxes would requite. She cannot schedule overtime because Anchor has a policy against it. JCL wil not accept fewer than 10.000 tool bowes. Therefore, in order to fill the speciat erder, it would be necessary for Anchor Company to divert some of its regular sales to the special ordet. Required: 1.a. Prepare contribution margin income statements for the two-month petiod both with and without the special ordec (teave no cells blank - be certain to enter "O" wherever required.) Proctoring Enabled. MH Lab3; Relcwant Costing (i) 1.b. Based on financial considerations, should Anchor accept ita order? Accept Not Accept 2. This part of the question is not part of your Connect assignment

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

Students also viewed these Accounting questions