Reference no: EM13581018
Variable Costs................................$180,000
Fixed costs.......................................240,000
1.Martin has received a special order from a foreign company for 5,000 units. There are no non-financial factors affected. There is sufficient capacity to fill the order without jeopardizing regular sales. Filling the order will require spending an additional $8,500 for shipping.
If Martin wants to earn $8,000 on the order, what should the unit price be?
2.Lawrence Legal Services recently billed a customer $720. Labor hours were 6 and the cost of the materials used was $150. If the company's hourly labor rate was $75, what material loading charge was used?
3.Billings Company has the following costs when producing 100,000 units:
Variable costs..............................$800,000
Fixed costs.................................1,200,000
An outside supplier has offered to make the item at $6 a unit. If the decision is made to purchase the item outside, current production facilities could be leased to another company for $220,000. The net increase (decrease) in the net income of accepting the supplier's offer is
- $(20,000)
- $1,120,000
- $380,000
- $420,000
4.The cost to produce Part A was $20 per unit in 2014. During 2015, it has increased to $22 per unit. In 2015, supplier company has offered to supply Part A for $18 per unit. For the make-or-buy decision,
A)differential costs are $4 per unit
B)net relevant costs are $2 per unit
C)incremental revenues are $4 per unit.
D)incremental costs are $2 per unit