1. Bluebird Manufacturing has received a special one-time order for 15,900 bird feeders at $3.90 per unit....
Question:
1. Bluebird Manufacturing has received a special one-time order for 15,900 bird feeders at $3.90 per unit. Bluebird currently produces and sells 75,000 units at $7.90 each. This level represents 80% of its capacity. Production costs for these units are $4.40 per unit, which includes $3.15 of variable costs and $2.15 of fixed costs. If the special offer is accepted, there will be no incremental fixed cost. If Bluebird accepts this additional business, the effect on income will be:
2.
Markson Company had the following results of operations for the past year:
| Contribution margin income statement | Per Unit | Annual Total |
|---|---|---|
| Sales (12,000 units) | $ 20.00 | $ 240,000 |
| Variable costs | ||
| Direct materials | 4.25 | 51,000 |
| Direct labor | 6.00 | 72,000 |
| Overhead | 2.00 | 24,000 |
| Contribution margin | 7.75 | 93,000 |
| Fixed costs | ||
| Fixed overhead | 4.25 | 51,000 |
| Income | $ 3.50 | $ 42,000 |
A foreign company offers to buy 4,000 units at $14 per unit. In addition to variable manufacturingand administrative costs, selling these units would increase fixed overhead by $3,200 for the purchase of special tools. Markson's annual productive capacity is 18,000 units. If Markson accepts this additional business, its profits will:
3. Kobe Company has manufactured 200 partially finished cabinets at a cost of $100,000. These can be sold as is for $120,000. Instead, the cabinets can be stained and fitted with hardware to make finished cabinets. Further processing costs would be $24,000, and the finished cabinets could be sold for $160,000. If Kobe Company processes the cabinets further, incremental income is:
Expert Answer:
Answer 1 Bluebird Manufacturings Special OneTime Order Given information Bluebird currently produces and sells 75000 units at 790 each which represents 80 of its capacity Production costs for these un... View the full answer
