+1-415-670-9189
info@expertsmind.com
Determine what montgomery profit or loss be from selling
Course:- Accounting Basics
Reference No.:- EM131810853




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Accounting Basics

Question - Montgomery Company has a normal plant capacity of 37,500 units per month. Because of an extra large quantity of inventory on hand, it expects to produce only 30,000 units in May. The present selling price is $13.50 per unit. Montgomery has an opportunity to sell 7,500 additional units at $9.00 per unit to an exporter who plans to market the product under its own brand name in a foreign market. The additional business is, therefore, not expected to affect the regular selling price or quantity of sales of Montgomery Company. The cost to make the product is:

Direct Materials $ 3.00

Direct Labor $ 1.25

Variable Overhead $ 4.00

Fixed Overhead $ 3.00

Total Cost $11.25

Total fixed costs won't change if this order is accepted but special shipping charges on the order will cost a total of $2,000. Determine what Montgomery's profit or loss will be from selling the 7,500 additional units to the exporter. Clearly state both the amount and whether it is a profit or a loss.




Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
MLC, Inc. plans to either lease or buy equipment. The equipment has a 3-year life with no salvage expected. The company will depreciate on a straight-line basis over 3 years.
Cole Manufacturing Company buys land for $50,000 on12-31-2000. As of 3-31-2001, the land has appreciated in value to$50,500. On 12-31-2001, the land has an appraised value o
An analysis of the transactions made by S. Moses & Co., a certified public accounting firm, for the month of August is shown below. The expenses were $650 for rent, $4,900 for
Your portfolio is diversified.  It has an expected return of 11% and a beta of 1.10. Calculate the expected return on the portfolio after the purchase of the Tundra Stock
Dean and Robin owned a family business, each holding the shares as community property. When they were divorced in 2011, the court did not force them to split the shares, cit
Discuss the importance of understanding the GAAP behind business combinations before performing the accounting. Additionally, why is it important that accountants report the
Some economic historians have argued that the railroad companies charged lower prices to ship freight because they owned so much land along the tracks. Briefly explain the r
A Corporation is considering issuing a convertible bond. What is a convertible bond and the advantages of a convertible bond from the standpoint of 1) the bondholder and 2)