Answer:
$267.00
Explanation:
First and foremost, it should be borne in mind that the overhead per direct labor hour is the total forecast overhead costs for next year divided by the planned direct labor hours, in essence, we simply determine plantwide overhead allocation rate, which is the basis for determining the amount of direct to be assigned to 6 direct labor hours
plantwide overhead allocation rate=(indirect labor overhead+factory utilities)/planned direct labor
indirect labor overhead cost=$2,967,000
factory utilities=$860,000
planned direct labor hours=86,000
plantwide overhead allocation rate=($2,967,000+$860,000)/86000
plantwide overhead allocation rate=$44.50
overhead allocation to a product requiring 6 direct labor hours=6*$44.50
overhead allocation to a product requiring 6 direct labor hours=$267.00
Consider the following four investments. a)You invest $3,000 annually in a mutual fund that earns 10 percent annually, and you reinvest all distributions. How much will you have in the account at the end of 20 years
Answer: $171,825
Explanation:
As you invest the same base amount as well as every distribution you receive, this can be said to be an annuity due to the amount being the same and the interest being compounded.
The value at the end of 20 years would be the future value of this annuity and is calculable as follows:
= Annuity * ( ( 1 + rate) ^ number of period - 1) / rate
= 3,000 * ( ( 1 + 10%)²⁰ - 1) / 10%
= $171,824.998
= $171,825
How has persuasion changed in the digital age?
a. Persuasion is simple and more personal
b. Persuasive techniques are bold and blunt
c. Persuasive messages spread at warp speed
d. All businesses are in the persuasion business
e. The volume and reach of persuasive messages have exploded
Answer:
Explanation:
Persuasion has changed a lot in the digital age, based on the options listed, the ones that are true would be ...
c. Persuasive messages spread at warp speed
d. All businesses are in the persuasion business
e. The volume and reach of persuasive messages have exploded
The internet and social media have allowed businesses to quickly and easily target millions of individuals around the world. So it is no wonder that all businesses are in the persuasion business. Persuasive techniques are able to spread incredibly fast from person to person, as well as word of mouth if enough individuals begin to like your product/service. The internet and social media even allow businesses to target specific categories on populations.
What can organizations do to keep rewards individualized enough to meet various employee needs (needs theory) while trying to ensure that everyone feels that all the different rewards are fair (equity theory)
Answer:
The best way to go about this is to design and operate and rewards system that recognizes individual needs as summarized and proposed by David McClelland.
The theory of equity on the other hand speaks to the perception of how input is compensated for in relation to those of others. Human beings (workers) will come with varying degrees of skills and input.
So to customize rewards in such a way that it recognizes unique contributions in an equitable way, one must first decide what key skills will be required for each job and which jobs are required to achieve organizational goals and objectives.
Explanation:
The Needs Theory by David Mclelland summarizes individual needs into three. They are:
Achievement AffiliationPowerA balanced reward system will have financial and non-financial benefits. some of the non-financial benefits will be tailored to have the above components.
- Achievement: An example of this is - Opportunity for higher assignments
- Affiliation: The need to belong to a strong Employer brand
- Power: This answers the question about whether or not one will become more influential as they progress with the company
The equity theory will guide the business owner in ensuring that all selected metrics of input are classed and priced accordingly.
The usual form of input include but are not limited to:
Ability Adaptability Commitment Determination Education Effort Enthusiasm Experience Flexibility Hard Work Loyalty Personal sacrifice Skill Support from co-workers and colleagues Time Tolerance Trust in supervisorsEquity sometimes is difficult to achieve due to issues with capacity on the part of the company. Best practice, however, is to recognize equity first from the perspective of standard industry practice, then match or exceed such offering by a combination of Financial and Non-Financial rewards that are based on the strength of the organization.
Another strategy is for organizations to adapt it's reward systems to Achievement Based Compensation. This type of compensation instead of focusing on the inputs listed above focuses on results.
In this case, expected results and capacity to deliver and subsequent rewards on same are discussed and agreed upon.
Minimum requirements are also defined ahead of time. Under this kind of structure, equity is achieved, and individual needs are recognized.
Cheers
It is essential that organizations meet the needs of employees on an individual basis and ensure that everyone feels that the different rewards are fair. This can be achieved by implementing a culture focused on integration, collaboration and open and clear communication.
What is Equity theory?It is a theory that explains how motivation in the workplace is related to the perception of employees through their sense of justice, that is, employees compare their work inputs and outputs in relation to others.
Therefore, by creating open communication and an effective reward system, employees can have their needs met and create a strong sense of appreciation for their work.
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Why are ethical issues complicated for businesses that operate in the global economy? Because different cultures have different norms and values. Because their employees won't know what the laws are in other countries. Because they tend to have more employees. Because they don't have as much moral character as small, local businesses.
Answer:
Because different cultures have different norms and values.
Explanation:
Ethical issues are mostly complicated for businesses that operate in the global economy because different cultures have different norms and values.
Mr. and Mrs. Underhill operate a hardware store in a jurisdiction that levies both a sales tax on retail sales of tangible personalty and an annual personal property tax on business tangibles. The personal property tax is based on book value as of December 31. This year, Mr. and Mrs. Underhill purchased $840,000 of inventory for their store.a. Are Mr. and Mrs. CS required to pay sales tax on the purchase of the inventory?b. How can Mr. and Mrs. CS minimize their personal property tax by controlling the timing of their inventory purchases?A. Minimize inventory on hand as of December 31.
B. Minimize inventory on hand as of March 31.
C. Minimize inventory on hand as of December 1.
D. Minimize inventory on hand as of April 30.
Answer:
a). No.
b). Minimize inventory on hand as of December 31.
Explanation:
As per the details provided, the Underhill couple is not eligible to pay any kind of sales tax while purchasing the inventories for their business. This is because the inventories are not purchased for resale. The sales tax that is levied on the final good(sold to the consumer) includes the tax on inventories indirectly as well. Therefore, charging sales tax on inventories when bought would lead to double tax on a single good. Thus, the answer would be 'No' i.e. option a.
As per the second question, in order to minimize the property taxes the couple requires to 'decrease their purchases associated with inventory on approaching December 31st.' This is due to the rule of 'First In and First Out.' If the inventories on 31st December is restricted, the taxes would be applied on property accordingly but if there's a huge stock, the higher amount of taxes would be levied depending on the property that is being used for the business. Thus, option b is the correct answer.
Management of Carla Vista Home Furnishings is considering acquiring a new machine that can create customized window treatments. The equipment will cost $199,550 and will generate cash flows of $104,750 over each of the next six years. If the cost of capital is 13 percent, what is the MIRR on this project
Answer:
MIRR = 27.85%
Explanation:
Below is the calculations:
The cost of equipment, Present value = $199550
Generate cash flow each year = $104750
Time = 6 years
Now find the future value of annual cash flow = 104750 (F/A , 13%, 6)
The future value of annual cash flow =104750 x 8.3227
The future value of annual cash flow = $871802.825
Now find the MIRR = (871802.825 / 199550)^(1/6)-1
MIRR = (4.3688)^(1/6)-1
MIRR = 27.85%
Moccasin Company manufactures cotton shirts. 12,000 shirts are produced during the first week of July. The unit quantity standard is 3 meters cloth per shirt and the actual quantity used was 0.50 meters per shirt. Determine the quantity of cloth that should be used for the actual output of 12,000 shirts.
Answer:
the quantity of cloth that should be used for the actual output of 12,000 shirts is 36,000 meters
Explanation:
The computation of the quantity of cloth is as follows:
Quantity of cloth that should be used is
= 12,000 × 3 meters cloth per shirt
= 36,000 Meters
hence, the quantity of cloth that should be used for the actual output of 12,000 shirts is 36,000 meters
The same is relevant
The basic premise of unrelated diversification is that:
a. the least risky way to diversify is to seek out businesses that are leaders in their respective industry.
b. the best companies to acquire are those that offer the greatest economies of scope rather than the greatest economies of scale.
c. the best way to build shareholder value is to acquire businesses with strong cross-business financial fit.
d. any company that can be acquired on good financial terms and that has satisfactory growth and earnings potential represents a good acquisition and a good business opportunity.
e. the task of building shareholder value is better served by seeking to stabilize earnings across the entire business cycle than by seeking to capture cross-business strategic fits.
Answer: d. any company that can be acquired on good financial terms and that has satisfactory growth and earnings potential represents a good acquisition and a good business opportunity.
Explanation:
Unrelated diversification refers to the addition of a subsidiary to a company so as to penetrate new markets and make more income.
When a company is deciding on a company to acquire, it will choose one that can be acquired relatively cheaply or at least at a fair value give its assets as well as one that has good growth prospects and potential to earn returns that will increase the returns of the purchasing company.
Unrelated diversification values favorable acquisitions and growth potential over industry leadership or strategic fits for shareholder value. Therefore, option d is correct.
Unrelated diversification refers to a corporate strategy where a company enters into businesses that are unrelated or have little overlap with its current operations or industry.
It involves expanding into new and distinct markets or industries that are not directly related to the company's existing products or services.
The aim of unrelated diversification is to spread business risk, tap into new sources of revenue, and achieve growth by entering unrelated markets.
This strategy often involves acquiring or starting businesses that may offer different growth opportunities or have synergistic potential, despite lacking strategic or operational connections to the existing core business.
Therefore, option d is correct.
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Consider the following information about production in quarter 1 of 2019. Firm T produces 600 tires at a cost of $28 each, and sells 580 tires to Firm B at a cost of $39 each.Firm B produces 290 bicycles at a total cost of $330 each, and sells 280 bicycles to consumers for $400 each. In this simple economy, what is the value of inventory investment
Answer:
$3,860
Explanation:
Value of stock at the end of Firm T:
Firm T has stock of 20 tires at the end of the year
The cost price is $28 per tire
Value = Closing stock * Cost price of each tIres
Value = 20 * $28
Value = $560
Value of stock at the end of Firm B:
Firm B has stock of 10 bicycles at the end of the year
The cost price is $330 each
Value = Closing stock * Cost price of each bicycle
Value = 10 * $330
Value = $3,300
Value of the inventory investment = Value of stock at the end of Firm T + Value of stock at the end of Firm B
Value of the inventory investment = $560 + $3,300
Value of the inventory investment = $3,860
2. Which of the following is most likely to raise a significant ethical issue? (select one).
Answer:
A Business School student looking at changes in structures of Small and Medium Sized Enterprises (SMEs) using publicly available information
Explanation:
Revising for Conciseness - Rejecting Redundancies and PurgingEmpty Words
Concise writing will save your reader time and make your message easier to understand. During phase three of the 3-x-3 writing process, revise for conciseness by rejecting redundancies and purging empty words.
1. Which of the following options are redundancies? Check all that apply.
1) Adequate enough
2) Combined together
3) Big in size
4) Absolutely essential
Determine which empty words can be purged from the following sentence to make it more concise.
2. The Johnson report contained incomplete data that was unfinished.
1) Johnson report" and "incomplete"
2) No revision necessary
3) That was unfinished"
Read the passage, and then answer the question.
[1] This community needs programs assisting those in the reentry process. [2] JUMP High Schools’ efforts to provide better information for newly released juvenile offenders are commendable. [3] Basic fundamental information on reentry services is sorely needed in our community.
3. What types of revisions could be made to the passage to make it more concise? Check all that apply.
1) Purge empty words.
2) Drop unnecessary fillers.
3) Reject redundancies.
Answer:
Answer (A) - 1 and 2
Answer (B) - 3
Answer (C) - 2
Explanation:
There are three sections to this question.
PART A: Rejecting Redundancies
Among the 4 options given in this section, the redundancies are
1. Adequate enough
2. Combined together
Why? Because there is repetition in the phrases! Adequate is the same thing as Enough and Combined means the same thing as Together.
PART B: Purging Empty Words
For the statement given, the option containing the empty words is
3. "that was unfinished"
Why? Because this is the unnecessary phrase that needs to be eliminated from the sentence, not even for conciseness sake but for the sake of proper grammar and better comprehension by the reader.
PART C: Revising a Passage
For the passage given, the type of revision that could be made to make it more concise is
2. Drop unnecessary fillers
Why? Because the second statement in the passage was an unnecessary filler. It contained information that required story telling about the efforts of "Jump High Schools".
If aggregate expenditures increase by $14 billion and equilibrium GDP consequently increases by $70 billion, then the marginal propensity to consume in the economy must be
Answer:
0.2
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
Marginal propensity to consume is the proportion of disposable income that is spent on consumption
Marginal propensity to consume = amount consumed / disposable income
Marginal propensity to save is the proportion of disposable income that is saved
Marginal propensity to save = amount saved / disposable income
MPC + MPS = 1
MPC = $14 billion / $70 billion = 0.2
MC Qu. 117 Geneva Co. reports the following... Geneva Co. reports the following information for July: Sales$792,000 Variable costs 239,000 Fixed costs 114,000 Calculate the contribution margin for July.
Answer:
$553,000
Explanation:
The contributon margin is the amount a level of sales contributes to recovering fixed costs of the organization, using the formula for contribution margin formula provided below:
contribution margin=sales-variable costs
sales revenue=$792,000
variable costs=$239,000
contribution margin=$792,000-$239,000
contribution margin=$553,000
A financial analyst who is employed by a large money management firm (e.g., a hedge fund or insurance company) whose reports are used only for internal firm use is called a(n): Buy-Side Analyst Floor analyst Sell-Side Analyst Independent Analyst Private analyst
Answer:
Private analyst
Explanation:
A Private Analyst is a person in which the research and the analysis is to be done for the companies in order to employed them for identified the undervalued opportunities
So as per the given situation since the reports are to be used for the internal purpose so this we called as the private analyst
Therefore the last option is correct
MotorCity, Inc. purchased 52,000 shares of Shaw common stock for $256,000. This represents 40% of the outstanding stock. The entry to record the transaction includes a:
Answer:
Debit to Long-Term Investments for $256,000
Explanation:
In the case when the shares are purchased they are considered for an investment that could generate the profit in near future. So here the long term assets is to be classified as the asset and the same is to be debited
Therefore it should be debited to the long term investment for $256,000
The same is relevant
A department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of March, there were 5,000 units in the beginning work in process inventory; 70,000 units were started into production in March; and there were 25,000 units that were 60% complete in the ending work in process inventory at the end of March. What were the equivalent units of production for conversion costs for the month of March
Answer:
75,000 equivalent units
Explanation:
Calculation to determine What were the equivalent units of production for conversion costs for the month of March
First step is to calculate completed and transferred units
Completed and transferred units =5,000 + 70,000 − 25,000
Completed and transferred units = 50,000
Now let determine the equivalent units for direct materials cost
Using this formula
Equivalent units for direct materials cost =100% of the completed units + 100% of the ending inventory
Let plug in the formula
Equivalent units for direct materials cost= (50,000 × 100%) + (25,000 × 100%)
Equivalent units for direct materials cost=50,000+25,000
Equivalent units for direct materials cost=75,000
Therefore the equivalent units of production for conversion costs for the month of March is 75,000
The real interest rate is 3 percent, the inflation rate is 2 percent, and the tax rate on nominal interest is 25 percent. What is the true income tax rate on interest income? Why does inflation increase the true tax rate on interest income?
Answer:
True income tax on interest income:
= Tax on interest income / Real interest rate
Tax on interest income = Tax rate * Nominal interest
= 25% * (3% real rate + 2% inflation)
= 25% * 5%
= 1.25%
True income tax:
= 1.25% / 3%
= 41.67%
Why does inflation increase the true tax rate on interest income?
It is because tax is computed on the nominal interest rate as shown above. Nominal rates are affected by inflation such that when inflation rises, nominal rates rise as well which would lead to taxes being higher because they are now based on a higher figure.
Date of NoteFace AmountInterest RateTerm of Notea.January 5 *$90,000 60 days b.February 15 *21,000 4 30 days c.May 1968,000
Answer and Explanation:
The computation is shown below:
Note Due date Interest Explanation
a) May-04 $ 1,800 ($ 90,000 × 6% × 120 ÷ 360)
b) Mar-16 $70 ($21,000 × 4% × 30 ÷ 360)
c) Jul-03 $680 ($68,000 × 8% × 45 ÷ 360)
In this way the interest expense should be calculated
The same should be relevant and considered too
xyz's corporation has an investment in 20,000 shares of wallace company common stock with a cost of $872,000. these shares are used in a property dividend to stockholders of xyz's. the property dividend is declared on may 25 and scheduled to be distributed on july 31 to stockholders of record on june 15. the fair value per share of wallace stock is $63 on may 25, $66 on june 15, and $68 on july 31. the net effect of this property dividend on retained earnings is a reduction of
Answer:
XYZ's Corporation
The net effect of this property dividend on retained earnings is a reduction of:
= $388,000.
Explanation:
a) Data and Calculations:
Cost of investment in Wallace Company = $872,000
Property dividend declaration date = May 25
Property dividend distribution date = July 31
Property dividend date of record = June 15
Fair value per share of Wallace shares:
May 25 = $63
June 15 = $66
July 31 = $68
Amount of property dividend declared = $1,260,000 ($63 * 20,000)
Analysis of entries:
May 25:
Property dividend $872,000 Loss on Distribution $388,000 Property Dividend Payable $1,260,000
July 31:
Property Dividend Payable $1,260,000 Cash $1,260,000
1. A beverage company is having trouble with the production of the dye in their drinks. The color of their drink mix is supposed to be a pale green color, but they often get different results. For each unwanted result, choose the most plausible explanation to help the company improve the formula. (1pts) The color of the drink is too pale after adding the dye to the drink because
Answer: • not enough dye was added to the drink.
Explanation:
The color of the drink is too pale after adding the dye to the drink because (not enough dye was added to the drink)
It should be noted that the reason why the color of the drink is too pale is due to the fact that not enough due was added to the drink.
It should be noted that as more dye is added to the drink, the color intensifies and the reason for the paleness of the colour is because less dye was added.
A 13-year, 6 percent coupon bond pays interest semiannually. The bond has a face value of $1,000. What is the percentage change in the price of this bond if the market yield to maturity rises to 6.7 percent from the current rate of 5.5 percent
Answer: -10.14%
Explanation:
Original Price of bond:
Interest is paid semiannually so some variables need to be adjusted:
Period = 13 * 2= 26 semi annual periods
Coupon = 6% * 1,000 * 0.5 = $30 per period
Yield = 5.5% / 2 = 2.75%
Price = $1,046
Price after yield increases to 6.7%
Period = 13 * 2= 26 semi annual periods
Coupon = 6% * 1,000 * 0.5 = $30 per period
Yield = 6.7% / 2 = 3.35%
Price = $939.88
Percentage change = (939.88 - 1,046) / 1,046
= -10.14%
Saving and net flows of capital and goods In a closed economy, saving and investment must be equal, but this is not the case in an open economy. In the following problem, you will explore how saving and investment are connected to the international flow of capital and goods in an economy. Before delving into the relationship between these various components of an economy, you will be asked to recall some relationships between aggregate variables that will be useful in your analysis
Recall the components that make up GDP. National income (Y) equals total expenditure on the economy's output of goods and services. Thus, where C consumption, I investment, G government purchases, X exports, M imports, and NX net exports: Y _________
Also, national saving is the income of the nation that is left after paying for Therefore, national saving (S) is defined as:
S _________
Rearranging the previous equation and solving for Y yields Y Plugging this into the original equation showing the various components of GDP results in the following relationship:
S ________
since net exports must equal net capital outflow (NCO, also known as net foreign investment) This is equivalent to S-
Now suppose that a country is experiencing a trade surplus. Determine the relationships between the entries in the following table, and enter these relationships using the following symbols: > (greater than), < (less than), or (equal to)
Outcomes of a Trade Surplus
Exports Imports
Net Exports 0
C+IG Y
Saving Investment C
0 Net Capital Outflow
Answer:
HAHAHAHAHAHAH
Explanation:
Bear Claw Industries uses a job-order costing system. The Molding Department applies overhead based on machine hours, while the Assembly Department applies overhead based on direct labor hours. The company made the following estimates at the beginning of the current year:
Molding Assembly
Manufacturing overhead cost $700,000 $400,000
Machine hours 10,000 4,000
Direct labor hours 12,000 16,000
The following information was available for Job No. 7-29, which was started and completed during August:______.
Job No. 7-29
Molding Assembly
Direct materials $3,500 $ 7,500
Direct labor $9,000 $12,500
Direct labor hours 900 1,250
Machine hours 500 400
The predetermined overhead rate for the molding department is:_____.
a. $50.
b. $70.
c. $100.
d. $83.
Answer:
Molding= $70 per machine hour
Explanation:
Giving the following information:
Molding
Manufacturing overhead cost $700,000
Machine hours 10,000
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Molding= 700,000 / 10,000
Molding= $70 per machine hour
A representative firm with long-run total cost given by TC = 2,000 + 20 q + 5 q 2 operates in a competitive industry where the market demand is given by QD = 10,000 – 40 P. The long-run equilibrium output of the industry will be:
Answer:
Output = 22.88
Explanation:
Below is the given functions:
TC = 2,000 + 20 q + 5 q^2
QD = 10,000 – 40 P
P = (QD - 10000) / 40
Find the MC from TC.
Take tha first derivative of TC.
MC = 20 + 10q
Now TR = PQ
TR = ( (10000 - Q) / 40) Q ......QD = Q
TR = 10000Q/40 - Q^2 / 40
MR =250 - Q/20
Now equate = MR =MC
250 - Q/20 = 20 + 10Q
-0.05Q - 10Q = 20 - 250
-10.05Q = - 230
Q = 22.88
Output = 22.88
MC Qu. 77 During March, a firm expects its total... During March, a firm expects its total sales to be $151,000, its total variable costs to be $94,100, and its total fixed costs to be $24,100. The contribution margin for March is:
Answer:
$56,900
Explanation:
Contribution margin is used to determine the profitability of a product. it is price less variable cost
Contribution margin = total sales - variable costs
151,000 - 94100 = 56900
A customer sells short 1,000 shares of DT at $60 a share on Monday, October 14 and deposits the Regulation T margin requirement. If on October 23 the stock is trading at $75 a share. What would be TRUE about the customer selling?
Solution :
Adjusted Oct 23rd
Maintenance call will be issued, i.e. ,
$ 75k x 0.3 = 22.5 k
Equity only = 15k
Therefore, the account will be adjusted on October 23rd and the margin maintenance call will be issued.
The following partially completed T-accounts summarize transactions for Faaberg Corporation during the year: Raw Materials Work in Process Credit Credit Debit Beginning Balance Debit Beginning Balance 9,000 22,200 5,000 5,200 4,100 6,200 8,500 8,300 Finished Goods Manufacturing Overhead Credit Debit Credit Debit Beginning Balance 20,400 8,300 2,200 22,200 2,800 3,500 3,200 Cost of Goods Sold Debit Wages & Salaries Payable Credit 20,400 Beginning Balance Debit Credit 20,400 2,500 12,000
The direct labor cost was:
a. $20,400
b. $13.100
Answer:
$8,500
Explanation:
The computation of the direct labor cost is given below
The raw material issued should be
= 6,200 + 2,800
= 9,000
The manufacturing overhead applied is 8,300
So, here the amount should be from both work in process and manufacturing overhead
Therefore the remaining amount i.e. $8,500 should be the direct labor cost
Staples promises an excellent online shopping experience, free delivery for purchases over $49.97, buy-online-collect in store, and a wide range of products available for purchase in the store. Staples is following ________ strategy. a. a multichannel marketing.b. a market penetration strategy.c. an interlocking marketing.d. a dual distribution approach.e. a cross-functional disrribution strategy.
Answer:
b. a market penetration strategy
Explanation:
Market penetration means that it offered a greater products range at the lower price in order to outplayed the competitors and the customers for purchasing the product from the new company
Since in the given situation, it is mentioned that the free delivery is to be provided when purchase is more than $49.97 also the wider range is available
So the option b is correct
Financial information is presented below: Operating Expenses $ 89300 Sales Returns and Allowances 17000 Sales Discounts 11700 Sales Revenue 320900 Cost of Goods Sold 173900 The amount of net sales on the income statement would be
Answer:
Net sales = 292200
Explanation:
Below is the given values:
Operating expenses = $89300
Sales return = 17000
Sales discounts = 11700
Sales revenue = 320900
Cost of goods sold = 173900
Net sales = Sales revenue - Sales discount - Sales return
Net sales = 320900 - 11700 - 17000
Net sales = 292200
Dockwiller Inc. manufactures industrial components. One of its products, which is used in the construction of industrial air conditioners, is known as D53. Data concerning this product are given below:
Per Unit
Selling price $1.50
Direct materials $26
Direct labor $3
Variable manufacturing overhead $1
Fixed manufacturing overhead $17
Variable selling expense $2
Fixed selling and administrative expense $18
The above per unit data are based on annual production of 3,000 units of the component. Assume that direct labor is a variable cost. The company has received a special, one-time-only order for 200 units of component S06. There would be no variable selling expense on this special order and the total fixed manufacturing overhead and fixed selling and administrative expenses of the company would not be affected by the order. If XYZ has excess capacity and can fill the order without cutting back on the production of any product, what is the minimum price per unit below which the company should not accept the special order?
a. $67 per unit
b. $150 per unit
c. $30 per unit
d. $47 per unit
Answer:
c. $30 per unit
Explanation:
The computation of the minimum price per unit below which the company should not accept the special order is given below:
Direct materials $26
Direct labor $3
Variable manufacturing overhead $1
minimum price per unit $30
Therefore the option c is correct
