How many dollars would pre-tax profit increase

Assignment Help Accounting Basics

Reference no: EM132984759

Question: Hartford, Inc. manufactures a single product. Shown are projected revenues and costs based on last year's income statement (8,000 units) and practical capacity (10,000 units).

	Last Year (8,000 units)		Practical Capacity (10,000 units)
	Total	Per Unit	Total	Per Unit
Revenue	$800,000	$100.00	$1,000,000	$100.00
Costs:
Direct Material	$200,000	$25.00	$250,000	$25.00
Direct Labor	$160,000	$20.00	$200,000	$20.00
Mfg. Overhead	$180,000	$22.50	$200,000	$20.00
Selling Expenses	$40,000	$5.00	$50,000	$5.00
Admin. Expenses	$50,000	$6.25	$50,000	$5.00
Total Costs	$630,000	$78.75	$750,000	$75.00
Pre-Tax Profit	$170,000		$250,000

Required

1. Assume that Hartford expects to sell the same number of units as last year in their normal distribution channels (8,000 units). They have received an offer from a one-time customer (not part of their normal customer mix) to buy 1,000 units (additional to their expected normal sales) at a price of $71. By how many dollars would pre-tax profit increase or decrease if Hartford accepts the special order?

Reference no: EM132984759

Questions Cloud

What type of opinion did auditors issue regarding best buy : What type of opinion did the auditors issue regarding Best Buy's 2012 financial statements? What does this type of opinion mean?

What is the no-arbitrage 1-year forward rate : What is the no-arbitrage 1-year forward rate for the euro in terms of dollars (USD/EUR)?

What differences between the net income and the cash : What are the major differences between the net income and the cash provided or used by operating activities, and the major difference between the two values?

Evaluate the components of coaching : Developed a plan to link the performance management system with an organization's strategic goals. It is time to evaluate the following concepts: coaching, coac

How many dollars would pre-tax profit increase : How many dollars would pre-tax profit increase or decrease if Hartford accepts the special order - units as last year in their normal distribution channels

What is the importance of memo assignments : What is the importance of memo assignments and why as a Master's degree student?

Necessary for the expansion to be successful : Assume that you are the HR manager of a mid-sized business in British Columbia and the CEO of your company is planning expansion in the near future. As an HR ma

How costs flow from inventory to cost of goods sold : How costs flow from inventory to cost of goods sold for the FIFO and LIFO methods. If costs were declining, will the LIFO or FIFO method of inventory valuation

Why is ergonomic job design become increasingly important : Why is ergonomic job design become increasingly important?

User Account

All Pages