Solution-How much is loft lake change in operating income

How much is loft lake change in operating income

Assignment Help Cost Accounting

Reference no: EM132738097

Loft Lake Cabinets is approached by Ms. Jenny Zhang, a new customer, to fulfill a large one-time-only special order of 200 units at $190 each for a product similar to one offered to regular customers. Loft Lake's production capacity is 2,000 units.

The following per unit data apply for sales to regular customers:

Direct materials $50.00
Direct labor 65
Variable manufacturing support 25.00
Fixed manufacturing support 30
Variable marketing cost 10.00
Fixed marketing cost 15
Total costs 180.00 per unit

Selling price $280.00 per unit

Ms. Zhang wants the cabinets in cherry rather than oak, so direct material costs will increase by $15 per unit. Special order will not incur variable marketing cost.

Problem 1: If Loft Lake Cabinets currently sells 1,800 units to regular customers, how much is Loft Lake's change in operating income if the special order is accepted?

Problem 2: If Loft Lake Cabinets currently sells 2,000 units to regular customers. For Loft Lake Cabinets, what is the minimum acceptable selling price of this one-time-only special order?

Reference no: EM132738097

Questions Cloud

Evaluate the ethics of becton dickinson : Evaluate the ethics of Becton Dickinson's use of the GPO system in the late 1990s. Are the GPOs monopolies? Are they ethical? Explain.

How the company might change the accounting system : How the company might change its accounting system to better reflect the reporting? problems? Are there other problems with the purchasing? area?

Critically analyse the strengths and weaknesses of the gni : Critically analyse the strengths and weaknesses of the GNI as a way of managing the human rights obligations of ICT firms.

Draft an adverse audit opinion report to the cfef management : Assume that your audit manager arrives in the office early the next morning and sees the CFEF audit ready for review. She reads your review notes first.

How much is loft lake change in operating income : If Loft Lake Cabinets currently sells 1,800 units to regular customers, how much is Loft Lake's change in operating income if the special order is accepted?

What is the relevance or otherwise of charismatic leadership : What is the relevance or otherwise of charismatic leadership theory for managers in the contemporary environment

Prepare journal entries for end of the period : Robinson Ltd employs its staff on a five-day work week, with employees being paid on Fridays. The weekly salaries expense is $120,000 and employees are paid in.

Decision-making and work team operations : How can you encourage team members to participate in planning, decision-making and work team operations?

How do companies account for each of the categories : There are three ways of classifying units that have been reworked. What are those classifications and how do companies account for each of those categories?

User Account

All Pages

How much is loft lake change in operating income

Reference no: EM132738097

Reference no: EM132738097

Questions Cloud

Reviews

Write a Review

Cost Accounting Questions & Answers

Cost accounting assignment

Prepare the journal entries

Advise as to the liability of all the parties

Prepare revenues budget

Effect of exchange rate changes on cash and cash

Corporate governance

Cost-benefit analysis

Non-annual interest rates and annuities

Job costing in service organizations

Accounting for bad debt expense

Accounting and partnership problems

Development of relevant cash flows

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT