Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Medal Plus Company manufactures medals for winners of athletic events and other contests. Its manufacturing plant ha 10,000 medals per month. The company normally

image text in transcribedimage text in transcribed

The Medal Plus Company manufactures medals for winners of athletic events and other contests. Its manufacturing plant ha 10,000 medals per month. The company normally charges $300 per medal. Cost information for the current activity level is a B3 (Click the icon to view the cost information.) Medal Plus has just received a special one-time-only special order for 2,000 medals at $250 per medal. Accepting the specia existing customers in batch sizes of 50 medals (200 batches x 50 medals per batch = 10,000 medals). The special order req Read the requirements. wou marry voor 1,785,000 Total costs 1,415,000 Operating income Based on the calculations under this scenario, Medal Plus should accept the one-time-only special order under the red Requirement 3. As in requirement 1, assume that monthly capacity is 12,000 medals. Medal Plus is concerned that if it acc $20 in the month in which the special order is being filled. Existing customers would argue that Medal Plus's capacity costs a costs. Should Medal Plus accept the special order under these conditions? Show your calculations. Select the labels and then enter the amounts to calculate the net effect on operating income from accepting the special order income from accepting the special order. Abbreviations used: Operating income = Ol; Special order = SO.) Net increase (decrease) in Ol from accepting so ber in the input fields and then click Check Answer. Decrease in Ol from accepting so Increase in Ol from accepting SO Ol gained from existing customers OI lost from existing customers Clear All The Medal Plus Company manufactures medals for winners of athletic events and other contests. Its manufacturing plant has the capacity to produce 12,000 medals each month. Current production and sales are 10,000 medals per month. The company normally charges $300 per medal. Cost information for the current activity level is as follows: (Click the icon to view the cost information.) Medal Plus has just received a special one-time-only special order for 2,000 medals at $250 per medal. Accepting the special order would not affect the company's regular business. Medal Plus makes medals for its existing customers in batch sizes of 50 medals (200 batches x 50 medals per batch = 10,000 medals). The special order requires Medal Plus to make the medals in 40 batches of 50 each. Read the requirements. Total costs 1,785,000 1,415,000 Operating income Based on the calculations under this scenario, Medal Plus should accept the one-time-only special order under the reduced capacity because accepting the order increases operating income by $ 65,000 . Requirement 3. As in requirement 1, assume that monthly capacity is 12,000 medals. Medal Plus is concerned that if it accepts the special order, its existing customers will immediately demand a price discount of $20 in the month in which the special order is being filled. Existing customers would argue that Medal Plus's capacity costs are now being spread over more units and that they should get the benefit of these lower costs. Should Medal Plus accept the special order under these conditions? Show your calculations. Select the labels and then enter the amounts to calculate the net effect on operating income from accepting the special order under this scenario. (Use a minus sign or parentheses to show a net decrease in operating income from accepting the special order. Abbreviations used: Operating income = Ol; Special order = SO.) Net Increase (decrease) in Ol from accepting SO = c k Answer. Decrease in Ol from accepting SO Choose from any list or enter any numbei Increase in Ol from accepting So Ol gained from existing customers - part Ol lost from existing customers 1 remaining Clear All Check Answer The Medal Plus Company manufactures medals for winners of athletic events and other contests. Its manufacturing plant ha 10,000 medals per month. The company normally charges $300 per medal. Cost information for the current activity level is a B3 (Click the icon to view the cost information.) Medal Plus has just received a special one-time-only special order for 2,000 medals at $250 per medal. Accepting the specia existing customers in batch sizes of 50 medals (200 batches x 50 medals per batch = 10,000 medals). The special order req Read the requirements. wou marry voor 1,785,000 Total costs 1,415,000 Operating income Based on the calculations under this scenario, Medal Plus should accept the one-time-only special order under the red Requirement 3. As in requirement 1, assume that monthly capacity is 12,000 medals. Medal Plus is concerned that if it acc $20 in the month in which the special order is being filled. Existing customers would argue that Medal Plus's capacity costs a costs. Should Medal Plus accept the special order under these conditions? Show your calculations. Select the labels and then enter the amounts to calculate the net effect on operating income from accepting the special order income from accepting the special order. Abbreviations used: Operating income = Ol; Special order = SO.) Net increase (decrease) in Ol from accepting so ber in the input fields and then click Check Answer. Decrease in Ol from accepting so Increase in Ol from accepting SO Ol gained from existing customers OI lost from existing customers Clear All The Medal Plus Company manufactures medals for winners of athletic events and other contests. Its manufacturing plant has the capacity to produce 12,000 medals each month. Current production and sales are 10,000 medals per month. The company normally charges $300 per medal. Cost information for the current activity level is as follows: (Click the icon to view the cost information.) Medal Plus has just received a special one-time-only special order for 2,000 medals at $250 per medal. Accepting the special order would not affect the company's regular business. Medal Plus makes medals for its existing customers in batch sizes of 50 medals (200 batches x 50 medals per batch = 10,000 medals). The special order requires Medal Plus to make the medals in 40 batches of 50 each. Read the requirements. Total costs 1,785,000 1,415,000 Operating income Based on the calculations under this scenario, Medal Plus should accept the one-time-only special order under the reduced capacity because accepting the order increases operating income by $ 65,000 . Requirement 3. As in requirement 1, assume that monthly capacity is 12,000 medals. Medal Plus is concerned that if it accepts the special order, its existing customers will immediately demand a price discount of $20 in the month in which the special order is being filled. Existing customers would argue that Medal Plus's capacity costs are now being spread over more units and that they should get the benefit of these lower costs. Should Medal Plus accept the special order under these conditions? Show your calculations. Select the labels and then enter the amounts to calculate the net effect on operating income from accepting the special order under this scenario. (Use a minus sign or parentheses to show a net decrease in operating income from accepting the special order. Abbreviations used: Operating income = Ol; Special order = SO.) Net Increase (decrease) in Ol from accepting SO = c k Answer. Decrease in Ol from accepting SO Choose from any list or enter any numbei Increase in Ol from accepting So Ol gained from existing customers - part Ol lost from existing customers 1 remaining Clear All Check

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_2

Step: 3

blur-text-image_3

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

Financial Accounting

Authors: Pauline Weetman

6th Edition

0273789252, 978-0273789253

More Books

Students also viewed these Accounting questions