Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Flagship Medals Company manufactures medais for winners of athletic events and other contests. Its manufacturing plant has the capacity to produce 1 LDDD medals

image text in transcribedimage text in transcribedimage text in transcribed
The Flagship Medals Company manufactures medais for winners of athletic events and other contests. Its manufacturing plant has the capacity to produce 1 LDDD medals each month; current production and sales are Bt] medals per month. The company normally charges 52W per medal. Cost information tor the current activity level is provided in the accompanying table. a (Click the icon to view the cost information.) Flagship Medals has just received a special one-time-oniv order for 2.0% medals at$18tl per medal. Accepting the special order would not affect the company's regular business. Flagship Medals makes medals for its existing customers in batch sizes of SD medals {160 batches x 5!] medals per batch = BIND medal-s). The special order requires Flagship Medals to make the medals in 2|) batches of1tilJ each. mm Requirement 2. Suppose plant capacity was only 8,500 medals instead of 11,000 medals each month. The special order must either be taken in full or rejected totally. Should Flagship Medals accept the special order? Calculate the operating income with the one-time special order and the reduced plant capacity. (Round your answers to the nearest whole dollar. Use parentheses or a minus sign for negative amounts or operating losses.) With special order Sales Variable costs: Direct materials Direct manufacturing labour Batch variable costs Fixed costs: Fixed manufacturing costs Fixed marketing costs Total costs Operating incomeVariable costs (vary with units produced): Direct materials 288,000 Direct labour 320,000 Variable costs (vary with number of batches): 107.200* Setups, materials handling, quality control Fixed manufacturing costs 330,000 230,000 Fixed marketing costs 1,275,200 Total costs *Costs of $107,200 are based on 160 batches at $670 per batch

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 Principles

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

10th Edition

1119491630, 978-1119491637, 978-0470534793

More Books

Students also viewed these Accounting questions

Question

Describe Table Structures in RDMSs.

Answered: 1 week ago