User Account

All Pages

What is the relevant cost to make a unit for special order

Assignment Help Accounting Basics
Reference no: EM131813367

Question - Majestic Company manufactures a product which has the following unit costs: direct materials, $10; direct labor, $7; variable overhead, $4; and general fixed overhead allocated, $5 (The total fixed costs will remain the same within the relevant range). Although production capacity is 90,000 units per year, the company expects to produce only 75,000 units next year. The product normally sells for $28 each. A customer has offered to buy 14,000 units for $26 each. There are no legal ramifications if this special order is accepted. Required: Calculate the following (Make sure you show you work)

a. What is the relevant (incremental) cost to make a unit for the special order?

b. What is the effect on Majestic's income if the special order is accepted? Another way to ask this question, what is the profit/loss on the special order?

c. Should the company accept the special order? Why?

Reference no: EM131813367

Questions Cloud

Solve problem using the normal distribution : A humane society reports that 19% of all pet dogs were adopted from an animal shelter. Assuming the truth of this assertion.
Discuss double-declining-balance : On January 1 Astoria Delivery purchased a light truck to use in the business
How many people will have functional smoke detector : In one study it was found that 86% of all homes have a functional smoke detector. Suppose this proportion is valid for all homes.
Discuss what factors go into deciding what makes up : Security is just one of the trade-offs that organizations must consider when designing their network infrastructure.
What is the relevant cost to make a unit for special order : A customer has offered to buy 14,000 units for $26 each. What is the relevant (incremental) cost to make a unit for the special order
Estimating the state insurance commission : A state insurance commission estimates that 13% of all motorists in its state are uninsured. Suppose this proportion is valid.
Identify and define the users of accounting information : What is accounting information? What role does it play in the firm
Analyze the pros and cons of each alternative architecture : Describe the alternative architectures that would be appropriate to meet the objectives of the project.
What collaborative methods of problem : What collaborative methods of problem MEE 5901, Advanced Solid Waste Management 3 solving could be use to solve the marketing team's problem of choosing an RPF?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd