Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Score One Company manufactures windows. Its manufacturing plant has the capacity to produce 12,000 windows each month. Current production and sales are 10,000 windows

image text in transcribed

The Score One Company manufactures windows. Its manufacturing plant has the capacity to produce 12,000 windows each month. Current production and sales are 10,000 windows per month. The company normally charges $300 per window. Cost information for the current activity level is as follows: BE: (Click the icon to view the cost information.) (Click the icon to view the special order information.) Read the requirements Requirement 1. Should Score One accept this special order? Show your calculations. Begin by completing an analysis, and start by showing the computation of the company's operating income without the special order. Next, calculate operating income with the special order, and then calculate the differences between the two columns. (Complete all input fields. For amounts with no change, make sure to enter "O' in the appropriate cells of the Difference column.) A Data Table Without One-Time Only Special Order 10,000 Windows Revenues S 600,000 Variable costs: 450,000 Direct materials Variable costs that vary with number of units produced Direct materials Direct manufacturing labor Variable costs (for setups, materials handling, quality control, and so on) that vary with number of batches, 200 batches * $1,500 per batch Fixed manufacturing costs Fixed marketing costs Total costs i Requirements 300,000 200,000 50,000 Direct manufacturing labor Batch manufacturing costs Fixed costs: Fixed manufacturing costs Fixed marketing costs S 1,600,000 * More Info Total costs Operating income 1. Should Score One accept this special order? Show your calculations. 2. Suppose plant capacity were only 11,000 windows instead of 12,000 windows each month. The special order must either be taken in full or be rejected completely. Should Score One accept the special order? Show your calculations 3. As in requirement 1, assume that monthly capacity is 12,000 windows. Score One is concerned that if it accepts the special order, its existing customers will immediately demand a price discount of $10 in the month in which the special order is being filled. They would argue that Score One's capacity costs are now being spread over more units and that existing customers should get the benefit of these lower costs. Should Score One accept the special order under these conditions? Show your calculations. Enter any number in the edit fields and then click Che Score One has just received a special one-time-only order for 2,000 windows at $250 per window. Accepting the special order would not affect the company's regular business or its fixed costs. Score One makes windows for its existing customers in batch sizes of 50 windows (200 batches x 50 windows per batch = 10,000 windows). The special order requires Score One to make the windows in 40 batches of 50 windows. 7 parts remaining

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

Management Accounting For Decision Makers

Authors: Dr Peter Atrill, Eddie McLaney

6th Edition

0273731521, 9780273731528

More Books

Students also viewed these Accounting questions

Question

7.3 Describe considerations in the preliminary applicant screening.

Answered: 1 week ago

Question

7.2 Explain the selection process.

Answered: 1 week ago