Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The CEO of your company has approached you for advice on a special order for a customer that she intends to tender for. She has

image text in transcribed

The CEO of your company has approached you for advice on a special order for a customer that she intends to tender for. She has supplied the following cost estimates: You ascertain the following: 1. The CEO estimates she has spent time in negotiation valued at $5,000. 2. Material J is in stock and the original cost is given above. There is no other use for material J, apart from using it on the special order within the factory and it would cost $3,500 to dispose of. Material K would have to be ordered at the cost shown above. 3. Direct labour costs of $12,000 relate to workers who will be transferred to the special order from another project, in replacement extra labour will need to be recruited to the other project at a cost of $14,000. 4. Supervision costs have been charged to the project on the basis of 331/3% of labour costs. Supervision will be carried out by existing staff within their normal duties. 5. Overheads have been charged to the project at the rate of 200% on direct labour. 6. The project will need machinery that will have no other use to the company apart from the special order. The machinery will have to be purchased at a cost of $20,000 and the disposed of for $10,500 when the special order is completed

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

Accounting Information Systems

Authors: Ulric Gelinas, Richard Dull, Patrick Wheeler

10th Edition

113393594X, 9781133935940

More Books

Students also viewed these Accounting questions