Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question No: 01 RABCO Supply makes game jerseys for Dubai teams. A] Nahda Club has offered to buy 100 jerseys for $15.00 per jersey. The
Question No: 01 RABCO Supply makes game jerseys for Dubai teams. A] Nahda Club has offered to buy 100 jerseys for $15.00 per jersey. The price per jersey normally is $18.00, an 80% markup over RABCO purchase price of $10.00 per jersey. RABCO adds a name and number to each jersey at a variable cost of $2.00 per jersey. The annual xed cost is $6,000 and other xed costs allocated to jerseys are $2,000. RABCO makes about 2,000 jerseys per year, so the xed cost is $4.00 per jersey. The machines are idle 75% of the useable time. The Manager turned down the offer of Al Nahda Club, saying it costs us $16 and it is irrational to accept 15. Required: 1. Compute the incremental N01 if the Co. would like to utilize 60% of unused capacity under A1 Nahda offer. 2. Find the opportunity cost if the manager declined the offer. 3. What would be your advice if A] Wasal Club .o'ers. to buy 39,000 items at 90% of the normal price. Other things remain the same
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started