Question
Wilson Wildhorse is a leading producer of vinyl replacement windows. The companys growth strategy focuses on developing domestic markets in large metropolitan areas. The company
Wilson Wildhorse is a leading producer of vinyl replacement windows. The companys growth strategy focuses on developing domestic markets in large metropolitan areas. The company operates a single manufacturing plant in Kansas City with an annual capacity of 500,000windows. Current production is budgeted at 450,000 windows per year, a quantity that has been constant over the past three years. Based on the budget, the accounting department has calculated the following unit costs for the windows:
Direct materials | $40.00 | ||
Direct labor | 18.00 | ||
Manufacturing overhead | 20.00 | ||
Selling and administrative | 14.00 | ||
Total unit cost | $92.00 |
The companys budget includes $5,400,000 in fixed overhead and $3,150,000 in fixed selling and administrative expenses. The windows sell for $150.00 each. A 2% distributors commission is included in the selling and administrative expenses.
Variable overhead per Unit: $8
Variable selling and admin cost per Unit: $7
Novak, Finlands second largest homebuilder, has approached Wilson with an offer to buy 75,000 windows during the coming year. Given the size of the order, Novak has requested a 40% volume discount on Wilsons normal selling price. The contribution lost from regular sales 25,000 units.Calculate the contribution from special order.(If net contribution is negative, enter amount with a negative sign, e.g. -5,285 or parentheses, e.g. (5,285). Round answer to 0 decimal places, e.g. 8,971.)
Net contribution from special order | $enter the net contribution from special order in dollars rounded to 0 decimal places |
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