decision making special order, Managerial Accounting

MNO Ltd produces and sells for $25 an office machine for which there is a heavy demand which the company is prevented from meeting because of a shortage of skilled labour. The direct material and labour costs of the machine are $10 and $ respectively. The labour force is paid $1.25 per hour. All other costs may be regarded as fixed.
The companies European representative has been invited by one of his customer to supply, for $2000, a batch machine of modified design and which customer wishes to incorporate into his own product.
MNO’s estimator hac calculated that the to execute the order. 200 direct labour hours would be required and the cost of material would be $850 excluding the cost of special switches which could be bought in for $100 or, alternatively, made by the company for a material cost of $40 and labour time of 20 hours.
Advise the management of MNO Ltd. Whether to accept the European order. Your answer should be supported by relevant calculations and should include comments on any other matters which you consider should be taken into account.
Posted Date: 11/25/2012 1:39:02 AM | Location : Malaysia







Related Discussions:- decision making special order, Assignment Help, Ask Question on decision making special order, Get Answer, Expert's Help, decision making special order Discussions

Write discussion on decision making special order
Your posts are moderated
Related Questions
Organizing (1) It is the establishment of the framework within which the required activities are to be performed and the designation of who should perform such activities. It inc

Case Study Labor standards Geeta & Company has experienced increased production costs. The primary area of concern identified by management is direct labor. The company is conside

Limitation of break even charts Despite many advantages a break even chart suffers from the following limitations: 1) A break even chart is based upon a number of assumption

During the year the company worked a total of 145,900 machine-hours on all jobs and incurred actual manufacturing overhead costs of $1,305,346. What is the amount of underapplied o

Computation of Working Capital Required 1. Operating Cycle Period = M+W+F+D-C     = 101.38 +2

Cash is a significant current asset for the operations of business. Cash is the fundamental input that maintains business running smoothly and continuously. In excess of cash and l

Bulk Agency Factoring : In this category factoring is essentially used as a method of financing book debts. In this sort of factoring the client continues to administer credit a

Explain standard costing according to backer and Jacobsen According to backer and Jacobsen, standard cost is the amount the firm to measure the variation from standard costs th

The std cost of chemical mixture~PQ is as follows: 40% of material P @rs.400/kg 60% of material Q @rs.600/kg A std loss of 10% is normally anticipated in pdn. The followinng parti

The most ticklish difficulty that is faced through the finance manager is the resolve of the amount of working capital requirement at a specific level of production. To resolve thi