Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 44 9 pts Geographer Company produces measuring tools for engineers. Their machinery has a capacity of 4,500 hours, but the Company currently uses 4,000

image text in transcribed
Question 44 9 pts Geographer Company produces measuring tools for engineers. Their machinery has a capacity of 4,500 hours, but the Company currently uses 4,000 of those hours. Geographer Company currently produces and sells 2,500 units at a selling price of $50. Total Variable Costs are $15 per unit, which includes $5 per unit of advertising costs. The fixed costs for the company are $100,000 Landslide Company approached Geographer Company with an offer to buy 320 units at a special price of $30 per unit. If Geographer Company accepts this offer, they would use up the remaining 500 hours they had available. Additionally, the Company would have to pay overtime to workers producing the extra units, so variable manufacturing costs would increase by an additional $10 per hour, however, the company would save on the $5 advertising per unit 1) If Geographer Company accepts the special order, by how much would Operating Income Change? 2) Would the change in Operating Income be an increase or decrease? 3) What would be the minimum per-unit price that Geographer Company would accept the special offer

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

Regulation Audit Inspection Standards And Risk A Handbook For Street Level Regulators

Authors: John E Brady, Amy J Brady

1st Edition

0993082238, 978-0993082238

More Books

Students also viewed these Accounting questions

Question

What are the primary causes and consequences of stress on the job?

Answered: 1 week ago