Capacity to accommodate the government order

Assignment Help Accounting Basics
Reference no: EM13259573

Healthy Hearth specializes in lunches for the health conscious.The company produces a small selection of lunch offerings each day.The menu selections may vary from day to day, but Healthy Hearthcharges the same price per menu selection because it adjusts theportion sizes according to the cost of producing the selection.Healthy Hearth currently sells 5,000 meals per month. Variablecosts are $3 per meal, and fixed costs total $5,000 per month. Agovernment agency has recently proposed that Healthy Hearth provide1,000 meals next month for senior citizens at $3.50 per meal.Volunteers will deliver the meals to the senior citizens at nocharge.

Required:

Suppose Healthy Hearth has sufficient idle capacity to accommodate the government order for next month. What will be the impact on Healthy Hearth's operating income if it acceptsthis order?

Suppose that Healthy Hearth would have to give up regular sales of 500 meals, at a price of $4.50 each, to accommodate the government order for next month. What will be the impact on Healthy Hearth's operating income if it accepts the government order?

Reference no: EM13259573

Questions Cloud

What led to the collapse of the economic environment : What led to the collapse of the economic environment within the U.S.? Answer the same question from an international perspective.
Prepare appropriate journal entries for these long-term bond : The following transactions relate to bondinvestments of Livermore Laboratories. Prepare the appropriate journal entries for these long-term bond investments.
How to calculated mass percent recovery of cu : what would be the effect on your calculated mass percent recovery of Cu if you did not completely react the Mg in the reaction mixture? Briefly explain.
Advantages of the small cases division : Which of the following would be considered advantages of the Small Cases Division of the Tax Court?
Capacity to accommodate the government order : Suppose Healthy Hearth has sufficient idle capacity to accommodate the government order for next month. What will be the impact on Healthy Hearth's operating income if it acceptsthis order?
Explain a certain biologically important reaction : Suppose that a certain biologically important reaction is quite slow at physiological temperature (37 degrees C ) in the absence of a catalyst.
Evaluate the spiritual needs of patients : The Joint Commission provides some guidelines for creating spiritual assessment tools for evaluating the spiritual needs of patients
Determine the total current supplied by the system : Determine the total current supplied by the system and when there is a Y connected capacitor to the bus and the phase impedance of the capacitor is 5 with an angle of -90 degrees (5
Incremental analysis for the special order : Prepare an incremental analysis for the special order. Should Pro Sports Inc. accept the special order? Explain your answer.

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  Stock issuance costs and direct combination costs

How are stock issuance costs and direct combination costs treated in a business combination which is accounted for as an acquisition when the subsidiary will retain its incorporation?

  Entries for bonds payable

Prepare the necessary journal entries to record the following transactions relating to the long-term issuance of bonds by Titus Co.:

  Type of accounting system

if the sales manager accepts a rush order that will result in higher than normal manufacturing costs, these additional costs are charged to the sales manager because the authority to accept or decline the rush order was given to the sales manager...

  Allowance for doubtful accounts

Determine the amount to be added to Allowance for Doubtful Accounts in each of following cases.

  Entry to eliminate subsidiary income and dividends

Under the partial equity method, the entry to eliminate subsidiary income and dividends includes a debit to

  Compare annual reports

With respect to the three reports in comparison: Income Statement, Cash Flow Statement, and Balance Sheet how can I "zero" in, or in laymen's terms, do an efficient comparison.

  Determining the felts gross profit

The beginning inventory (Jan. 1, 2010) was $170,000; in the past Felt's gross profit has averaged 40% of selling price.

  Issuance of bonds and payment of interest

On March 1, Year 1, a firm issues $475,000 bonds at par value plus accrued interest. The stated rate on the bonds was 12% and the bonds pay interest semi-annually on June 30 and December 31. Prepare the entries necessary to record

  After-tax profit of falcon company

Compute the after-tax profit of Falcon.Com separately for both the (1) FIFO and (2) LIFO methods of inventory valuation assuming the company has no expenses other than cost of goods sold and its income tax rate is 50%. Taxes are accrued currently ..

  Auditing failures evident in the failure of enron

What auditing failures evident in the failure of Enron and how would these failures have contributed to the overall collapse of the company?

  Basics of minimum lease payments

The minimum lease payments were determined to have a present value of $227,448 at an effective interest rate of 10%. With respect to this capitalized lease, for 2011 Ogleby should record:

  Janey tax basis for the machinery

The relevant costs for the year are as follows: machinery for $10,000, $800 shipping, $50 for delivery insurance, $500 for installation, $750 for sales tax, $150 for annual tune up, and $200 of property taxes (an annual tax on business property). ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd