Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Rutkey Collectibles is a small toy company that manufactures and sells metal replicas of classic cars. Each car sells for $3.30 The cost of each

Rutkey Collectibles is a small toy company that manufactures and sells metal replicas of classic cars. Each car sells for $3.30 The cost of each unit follows:image text in transcribed

Rutkey Collectibles is a small toy company that manufactures and sells metal replicas of classic cars. Each car sells for $3.30 The cost of each unit follows: Materials Labor Variable overhead Fixed overhead ($20,700 per month, 20,700 units per month) $1.00 0.50 0.30 Total costs per unit $280 One of Rutkey's regular customers asked the company to fill a special order of 500 units at a selling price of $2.30 per unit. Rutkey's can fill the order using existing capacity without affecting total fixed costs for the month. However, Rutkey's manager was concerned about selling at a price below the $2.80 cost per unit and has asked for your advice. Required: a. Prepare a schedule to show the impact of providing the special order of 500 units on Rutkey's profits in addition to the regular production and sales of 20,700 units per month. (Select option "higher" or "lower", keeping Status Quo as the base. Select "None" if there is no effect.) Status QuoAlternative 20,700 Cars 21,200 Cars Difference Sales revenue Less variable costs: Materials Labor Variable overhead Total variable cost Contribution margin Less: Fixed costs Operating profit b. Based solely on the data given, what is the lowest price per unit at which the model cars could be sold for the specialorder without reducing Rutkey's profits (Round your answer to 2 decimal places.) t price per car C. If Rutkey Collectibles company was operating at capacity, what would happen to operating profit if the special order was accepted? O Increase No change

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

The Process Auditing Techniques Guide

Authors: J. P. Russell

1st Edition

0873895959, 978-0873895958

More Books

Students also viewed these Accounting questions

Question

What is CREST?

Answered: 1 week ago

Question

Choose an appropriate organizational pattern for your speech

Answered: 1 week ago

Question

Writing a Strong Conclusion

Answered: 1 week ago