QUESTION 2 (35 points) Jwal Co. has a single product called a Phone. The company normally produces and sells 80000 Phones each year at a selling price of $50 per unit. The company's units production, selling price costs at the level of activity are given below were to create the The needlingen r e was ove the teacher by 180.000 Calculate the incrementale perting Income (10 points Assume again that has sufficient capacity to produce 106. Phones each year. A customer in a foreign market wants to purchase 27.300 Phone Import duties on the Phones would be 13.70 and costs for parms and less would be 21.840. The only selling costs that would be associated with the order would be $1,80 per unit shipping cost. Compute the per un break even price on this order is points) pisemne the Chosen on hand serve 20% of normal level for the two-month priedAs an emai l accontent nire are more the p reclosed faed r ing overtredici continue of the level during the en prend the p u lbereduced by 30%. What would be the impact on profits of closing the plant for the month SHOULD THE COMPANY SELL FOR 2 MONTHS OR CLOSEDOWN 2 pins 4) An outside manufacturer has offered to produce Phonos and ship them directly to Jawal customers. If Jawal Co. accepts this offer, the facilities that it uses to produce Phonos would be idle: however, fixed manufacturing overhead costs would be reduced by 50%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only three-fourth of their present amount. Compute the unit cost that is relevant for comparison to the price quoted by the outside manufacturer. (4 points.) Explanation The relevant costs are those that can be avoided by purchasing from the outside manufacturer. These costs are: Description Amount $ Variable manufacturing costs Fixed manufacturing overhead cost Variable selling expense Total costs avoided & Accepted minimum selling Price QUESTION 2 (35 points) Jwal Co. has a single product called a Phone. The company normally produces and sells 80000 Phones each year at a selling price of $50 per unit. The company's units production, selling price costs at the level of activity are given below were to create the The needlingen r e was ove the teacher by 180.000 Calculate the incrementale perting Income (10 points Assume again that has sufficient capacity to produce 106. Phones each year. A customer in a foreign market wants to purchase 27.300 Phone Import duties on the Phones would be 13.70 and costs for parms and less would be 21.840. The only selling costs that would be associated with the order would be $1,80 per unit shipping cost. Compute the per un break even price on this order is points) pisemne the Chosen on hand serve 20% of normal level for the two-month priedAs an emai l accontent nire are more the p reclosed faed r ing overtredici continue of the level during the en prend the p u lbereduced by 30%. What would be the impact on profits of closing the plant for the month SHOULD THE COMPANY SELL FOR 2 MONTHS OR CLOSEDOWN 2 pins 4) An outside manufacturer has offered to produce Phonos and ship them directly to Jawal customers. If Jawal Co. accepts this offer, the facilities that it uses to produce Phonos would be idle: however, fixed manufacturing overhead costs would be reduced by 50%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only three-fourth of their present amount. Compute the unit cost that is relevant for comparison to the price quoted by the outside manufacturer. (4 points.) Explanation The relevant costs are those that can be avoided by purchasing from the outside manufacturer. These costs are: Description Amount $ Variable manufacturing costs Fixed manufacturing overhead cost Variable selling expense Total costs avoided & Accepted minimum selling Price