Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 2 A company has been asked to carry out a special order. Completion of the order would require: 1. Raw materials: $ 180

image text in transcribed

Question 2 A company has been asked to carry out a special order. Completion of the order would require: 1. Raw materials: $ 180 kg of material M6" from inventory, bought at $16-40 per kg 2.952 400 kg of material M2 to be purchased at $14-30 per kg 5.720 8.672 10 pt *Material M6 is used on a regular basis by the company. The current replacement price is $16-90 per kg. 2.430 direct labour hours. The direct operatives, paid at $11 per hour, would have to be transferred from working on another project which would have generated a contribution of $1,960. 3. Incremental overheads of $2-50 per direct labour hour. General fixed overheads are absorbed at a rate of $14 per direct labour hour. The company must make a decision on whether to accept the special order. Required: . Calculate the relevant cost of the special order for the purpose of making the decision. (10 marks)

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

Financial Accounting

Authors: Charles Horngren, William Thomas, Walter Harrison, Greg Berberich, Catherine Seguin

5th Canadian edition

133472264, 978-0133446265, 133446263, 978-0133472264

More Books

Students also viewed these Accounting questions

Question

How will you to retrieve modifiers information of a class

Answered: 1 week ago