Hi-Tech is the creator of Y-Go, a technology that weaves silver into the fabric to kill...
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Hi-Tech is the creator of Y-Go, a technology that weaves silver into the fabric to kill bacteria and odour on clothing while managing heat. Y-GO has become very popular in undergarments for sports activities. Operating at capacity, Hi-Tech can produce 500,000 undergarments each year. The normal selling price is $10 per unit. The per unit cost for each unit is as follows: Direct materials Direct labour Per unit $2.00 Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses 0.50 1.00 1.25 0.25 The Canadian armed forces (CAF) has approached Hi Tech and expressed an interest in purchasing 75,000 Y-GO undergarments for soldiers stationed in hot climates. Required: To answer a, b, and c, use the minimum price model: Minimum price model Variable cost Plus: Lost CM on regular sales Equals Total minimum price (TMP) Unit price (TMP/ units in special order) XX XX XX a) If Hi-Tech is operating at 100% capacity what is the minimum price to charge? b) If Hi-Tech is operating at 90% capacity what is the minimum price to charge? c) If Hi-Tech is operating at 70% capacity what is the minimum price to charge? d) Assume High Tech is operating at 90% capacity and Hi-tech receives a special order from the CAF for 75,000 Y-Gos at a selling price of $8.00 per unit. Compute the increase in profit (or loss) if High Tech accepts the order. Hi-Tech is the creator of Y-Go, a technology that weaves silver into the fabric to kill bacteria and odour on clothing while managing heat. Y-GO has become very popular in undergarments for sports activities. Operating at capacity, Hi-Tech can produce 500,000 undergarments each year. The normal selling price is $10 per unit. The per unit cost for each unit is as follows: Direct materials Direct labour Per unit $2.00 Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses 0.50 1.00 1.25 0.25 The Canadian armed forces (CAF) has approached Hi Tech and expressed an interest in purchasing 75,000 Y-GO undergarments for soldiers stationed in hot climates. Required: To answer a, b, and c, use the minimum price model: Minimum price model Variable cost Plus: Lost CM on regular sales Equals Total minimum price (TMP) Unit price (TMP/ units in special order) XX XX XX a) If Hi-Tech is operating at 100% capacity what is the minimum price to charge? b) If Hi-Tech is operating at 90% capacity what is the minimum price to charge? c) If Hi-Tech is operating at 70% capacity what is the minimum price to charge? d) Assume High Tech is operating at 90% capacity and Hi-tech receives a special order from the CAF for 75,000 Y-Gos at a selling price of $8.00 per unit. Compute the increase in profit (or loss) if High Tech accepts the order.
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Related Book For
Managerial Accounting Tools for business decision making
ISBN: 978-0470477144
5th edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Posted Date:
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