Data tableDirect materialsDirect laborVariable manufacturing overheadFixed manufacturing overheadTotal manufacturing costsPrint$$Total costs for 80,000 unitsDone240,00036,00060,000100,000436,000XMore infoThe company's relevant range extends to 93,000 units. Press has received aspecial order for 8,000 t-shirts at a special price of $44,000 for the entire order. Thespecial order t-shirt would use a fabric that is less expensive than the standardfabric used by Press, which would allow Press to save $0.80 per t-shirt in directmaterials when manufacturing this special order. Press has the excess capacity tomanufacture this special order. Its total fixed costs will not be impacted by thespecial order.PrintDoneX Press Products manufactures t-shirts. It has the following costs when its production level is 80,000 units (t-shirts):(Click the icon to view the costs.)(Click the icon to view additional information.)What will happen to Press's operating income if it accepts this special order?Complete the following incremental analysis to determine the impact on Press's operating income if it accepts this special order. (Round all per unit amounts to the nearest cent, $X.XX, and all otheramounts to the nearest whole dollar. Enter a "0" for any zero balances. Use parentheses or a minus sign to indicate a decrease in contribution margin and/or operating income from the specialorder.)Incremental Analysis of Special Sales Order DecisionRevenue from special orderLess variable expense associated with the order:Direct materialsDirect laborVariable manufacturing overheadContribution marginLess: Additional fixed expenses associated with the orderIncrease (decrease) in operating income from the special orderPer UnitTotal Order(8,000 units)

Name: Data tableDirect materialsDirect laborVariable manufacturing overhead
Uploaded: 2024-03-20T06:33:06.000Z
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Description: Data tableDirect materialsDirect laborVariable manufacturing overheadFixed manufacturing overheadTotal manufacturing costsPrint$$Total costs for 80,000 unitsDone240,00036,00060,000100,000436,000XMore infoThe company's relevant range extends to 93,00

Lets understand the basics. When special order situation arise then management calcualtes relevant…

Business

Accounting

Data table Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing costs Print $ Total costs for 80,000 units Done 240,000 36,000 60,000 100,000 436,000 More info The company's relevant range extends to 93,000 units. Press has received a special order for 8,000 t-shirts at a special price of $44,000 for the entire order. The special order t-shirt would use a fabric that is less expensive than the standard fabric used y Press, which would allow Press to save $0.80 per t-shirt in direct materials when manufacturing this special order. Press has the excess capacity to manufacture this special order. Its total fixed costs will not be impacted by the special order. Print - Done X

Data table Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing costs Print $ Total costs for 80,000 units Done 240,000 36,000 60,000 100,000 436,000 More info The company's relevant range extends to 93,000 units. Press has received a special order for 8,000 t-shirts at a special price of $44,000 for the entire order. The special order t-shirt would use a fabric that is less expensive than the standard fabric used y Press, which would allow Press to save $0.80 per t-shirt in direct materials when manufacturing this special order. Press has the excess capacity to manufacture this special order. Its total fixed costs will not be impacted by the special order. Print - Done X

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Suppose that Head-First Company now sells both bicycle helmets and motorcycle helmets. The bicycle helmets are priced at $77 and have variable costs of $47 each. The motorcycle helmets are priced at $220 and have variable costs of $145 each. Total fixed cost for Head-First as a whole equals $57,000 (includes all fixed factory overhead and fixed selling and administrative expense). Next year, Head-First expects to sell 4,850 bicycle helmets and 1,940 motorcycle helmets. Required: 1. Form a package of bicycle and motorcycle helmets based on the sales mix expected for the coming year. 2. Calculate the break-even point in units for bicycle helmets and for motorcycle helmets. 3. Check your answer by preparing a contribution margin income statement.
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4 Lowwater Sailmakers manufactures sails for sailboats. The company has the capacity to produce 25,000 sails per year, but is currently producing and selling 20,000 sails per year. The following information relates to current production. If a special sales order is accepted for 4,500 sails at a price of $120 per unit, and fixed costs remain unchanged, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.) Sale price per unit $150 Variable costs per unit: Manufacturing Marketing and administratrve $60 $20 Total fixed costs: Manufacturing Marketing and administrative $600,000 S200,000 Increase by $160,000 ) Increase by $150,000 ) Increase by $140,000 Increase by S170,000 ) Increase by S180,000 ()
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