Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sunrise Inc. manufactures two types of electronic devices (Product A and Product B). The manufacturing process is presently constrained by the machine-hours available on the

image text in transcribed
image text in transcribed
Sunrise Inc. manufactures two types of electronic devices (Product A and Product B). The manufacturing process is presently constrained by the machine-hours available on the special purpose machines used in the manufacturing process working at full capacity) The selling prices and the manufacturing costs of the two products are as follows: Product A $ 200 Product B $ 300 Selling price/unit Variable costs/unit -Direct costs -Overhead (@$40/MH) $ 43 $ 28 $ 55 $ 46 Sunrise has been approached by Electronics Industries to make 250 units of a special device and is willing to pay $235 per unit. These special order will incur the following manufacturing costs and time; Variable costs/unit Machine-hours $32 200 Required a. Calculate the contribution margin per machine-hour for each of the three types of devices including the special order). (6 marks) b. Identify production of what product the company may have to reduce to fulfill the special order and explain why 2 marks) Required a. Calculate the contribution margin per machine hour for each of the three types of devices (including the special order). (6 marks) b. Identity production of what product the company may have to reduce to fulfill the special order and explain why (2 marks) c. Calculate the impact on short term operating income if the order is accepted. Remember, that to accept the special order, the company would need to release machine time for it by reducing the production of A or B product (4 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

Using QuickBooks Accountant 2018 For Accounting

Authors: Glenn Owen

16th Edition

0357042085, 9780357042083

More Books

Students also viewed these Accounting questions