Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Use the above information to answer the following questions about this special order. PartA: lfTallie Ltd. accepts this order, will operating income increase, decrease or

image text in transcribedimage text in transcribed
image text in transcribedimage text in transcribed
Use the above information to answer the following questions about this special order. PartA: lfTallie Ltd. accepts this order, will operating income increase, decrease or stay the same? Enter IN for increase, DE for decrease, and NA for stay the same in the space provided. x By how much will operating income change if the order is accepted? Enter your answer as a positive number. - Part B: Assume, INSTEAD, that the order from Hallaway Ltd. was obtained through a sales person so sales commission has to be paid. In addition, Hallaway Ltd. has asked Tallie Ltd. to pay all transportation costs. Given this new information, will Tallie's operating income increase, decrease or stay the same? Enter IN for increase, DE for decrease, and NA for stay the same in the space provided. x Given this new information, by how much will operating income change if the order was accepted now? Enter your answer as a positive number. [ia Tallie Ltd. produces jewelry boxes and one of their products has the following selling price and costs: . . Dollar value Descnptlon . per unit Selling price $50.00 Direct matenals $10.00 Direct labour $9.00 Variable overhead $8.00 Fixed overhead $100 Sales commission $2.50 Income per unit $13.50 The company also have some nonnmanufacturing fixed costs [such as sales and administration costs}. They have provided the following details: Capacity (units) 30,000 Current production (units) 24,000 Fixed nonmanufacturing costs {annual} $81 000 Hallaway Ltd. is a new onestime customer who has offered to buy the following jewelry boxes: Total units required 4,500 Purchase mice per unit $29.00 Transportation costs I unit $1.30 Hallaway Ltd. has agreed to pay the transportation costs. In addition. because no sales person was involved, there will be no sales commission paid on the sale to Hallaway Ltd. Required: Use the above information to answer the following questions about this special order

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

Financial Accounting Information For Decisions

Authors: John J. Wild

10th Edition

1260705587, 978-1260705584

More Books

Students also viewed these Accounting questions

Question

An improvement in the exchange of information in negotiations.

Answered: 1 week ago