The Gold Plus Company manufactures windows. Its manufacturing plant has the capacity to produce 20,000 windows...
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The Gold Plus Company manufactures windows. Its manufacturing plant has the capacity to produce 20,000 windows each month. Current production and sales are 15,000 windows per month. The company normally charges $150 per window. Cost information for the current activity level is as follows: (Click the icon to view the cost information.) (Click the icon to view the special order information.) Read the requirements Data table Variable costs that vary with number of units produced Direct materials Direct manufacturing labor Variable costs (for setups, materials handling, quality control, and so on) that vary with number of batches, 300 batches x $1,250 per batch Fixed manufacturing costs Fixed marketing costs Total costs $ 12 300,000 150,000 375,000 25,000 55,000 905,000 X More info Gold Plus has just received a special one-time-only order for 5,000 windows at $125 per window. Accepting the special order would not affect the company's regular business or its fixed costs. Gold Plus makes windows for its existing customers in batch sizes of 50 windows (300 batches x 50 windows per batch = 15,000 windows). The special order requires Gold Plus to make the windows in 100 batches of 50 windows. D Requirement Should Gold Plus accept this special order? Begin by completing an analysis and start by showing the computation of the company's operating income without the special order. Next, calculate the computation of the company's operating income with the special order then calculate the difference between the two columns. The Gold Plus Company manufactures windows. Its manufacturing plant has the capacity to produce 20,000 windows each month. Current production and sales are 15,000 windows per month. The company normally charges $150 per window. Cost information for the current activity level is as follows: (Click the icon to view the cost information.) (Click the icon to view the special order information.) Read the requirements Data table Variable costs that vary with number of units produced Direct materials Direct manufacturing labor Variable costs (for setups, materials handling, quality control, and so on) that vary with number of batches, 300 batches x $1,250 per batch Fixed manufacturing costs Fixed marketing costs Total costs $ 12 300,000 150,000 375,000 25,000 55,000 905,000 X More info Gold Plus has just received a special one-time-only order for 5,000 windows at $125 per window. Accepting the special order would not affect the company's regular business or its fixed costs. Gold Plus makes windows for its existing customers in batch sizes of 50 windows (300 batches x 50 windows per batch = 15,000 windows). The special order requires Gold Plus to make the windows in 100 batches of 50 windows. D Requirement Should Gold Plus accept this special order? Begin by completing an analysis and start by showing the computation of the company's operating income without the special order. Next, calculate the computation of the company's operating income with the special order then calculate the difference between the two columns.
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Determine whether Gold Plus Company should accept the special order Operating Income without Special ... View the full answer
Related Book For
Horngrens Cost Accounting A Managerial Emphasis
ISBN: 9780135628478
17th Edition
Authors: Srikant M. Datar, Madhav V. Rajan
Posted Date:
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