Baldwin Limited is involved in supply and maintenance of office equipment. One of its activities is...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Baldwin Limited is involved in supply and maintenance of office equipment. One of its activities is the sale of copiers. It offers a follow-up service to companies that wish to upgrade their copiers to give a wider range and speed of output. The work needed to upgrade copiers is carried out at customers premises. The upgrade involves the same work for most copiers and therefore a standard price is used, as follows. Copier upgrade-standard price Components Labour involved in travel to customers: 0,5 hour at £24 per hour Labour: 2 hours at £24 per hour Overhead: 200% of labour cost Total cost Profit mark-up at 20% on cost Standard price £ 75 12 48 Name: 120 255 51 306 A customer has asked Baldwin to quote for a special upgrading for 100 copiers at their offices. Using the standard price gave a total quote of £30.600 which was rejected by the customer. The customer's response was that a price of £15,000 was what they had in mind. Baldwin is in the process of changing to a different copier manufacturer. As this is probably the last major upgrade of the old manufacturer's copiers the sales director of Baldwin is keen to accept the order and recommends that a break-even price be calculated in order to provide information for further negotiation. The following information has been obtained: The standard upgrade requires three components (X. Y and Z) with a total cost of £75. Component X has a standard cost of £22 and will not be used when the change of manufacturer occurs. There is no alternative use for this component and it has no realizable value. Baldwin has 200 of these in stock. Components Y and Z will be compatible with the new manufacturer's copier. The special nature of the upgrade required by the customer requires a further component, W, which will have to be ordered from the current manufacturer at £34 per upgrade. (2) The estimated total labour time travelling to the customer for the upgrade of all of the copiers is 10 hours The repetitive nature of the work means that the labour time for upgrading each copier would be only 1,5 hours. The operations manager has suggested that 25% of the work could be carried out by trainees who are charged at half the hourly rare of qualified engineers. (4) The type of copier in question requires use of a special machine during upgrade. This will not be needed for the copiers from she new manufacturer. An offer to buy the machine for £800 has been received from another company; however they require immediate delivery or will not buy the machine. (5) Overheads are all fixed. HOME ASSIGNMENT #13 Group Required: Prepare a brief report for she sales director of Baldwin Ltd which includes a calculation of the break- even price for its special job and an explanation of the figures used. Comment on the factors which the sales director should consider when deciding on the price to quote for the special job. Baldwin Limited is involved in supply and maintenance of office equipment. One of its activities is the sale of copiers. It offers a follow-up service to companies that wish to upgrade their copiers to give a wider range and speed of output. The work needed to upgrade copiers is carried out at customers premises. The upgrade involves the same work for most copiers and therefore a standard price is used, as follows. Copier upgrade-standard price Components Labour involved in travel to customers: 0,5 hour at £24 per hour Labour: 2 hours at £24 per hour Overhead: 200% of labour cost Total cost Profit mark-up at 20% on cost Standard price £ 75 12 48 Name: 120 255 51 306 A customer has asked Baldwin to quote for a special upgrading for 100 copiers at their offices. Using the standard price gave a total quote of £30.600 which was rejected by the customer. The customer's response was that a price of £15,000 was what they had in mind. Baldwin is in the process of changing to a different copier manufacturer. As this is probably the last major upgrade of the old manufacturer's copiers the sales director of Baldwin is keen to accept the order and recommends that a break-even price be calculated in order to provide information for further negotiation. The following information has been obtained: The standard upgrade requires three components (X. Y and Z) with a total cost of £75. Component X has a standard cost of £22 and will not be used when the change of manufacturer occurs. There is no alternative use for this component and it has no realizable value. Baldwin has 200 of these in stock. Components Y and Z will be compatible with the new manufacturer's copier. The special nature of the upgrade required by the customer requires a further component, W, which will have to be ordered from the current manufacturer at £34 per upgrade. (2) The estimated total labour time travelling to the customer for the upgrade of all of the copiers is 10 hours The repetitive nature of the work means that the labour time for upgrading each copier would be only 1,5 hours. The operations manager has suggested that 25% of the work could be carried out by trainees who are charged at half the hourly rare of qualified engineers. (4) The type of copier in question requires use of a special machine during upgrade. This will not be needed for the copiers from she new manufacturer. An offer to buy the machine for £800 has been received from another company; however they require immediate delivery or will not buy the machine. (5) Overheads are all fixed. HOME ASSIGNMENT #13 Group Required: Prepare a brief report for she sales director of Baldwin Ltd which includes a calculation of the break- even price for its special job and an explanation of the figures used. Comment on the factors which the sales director should consider when deciding on the price to quote for the special job.
Expert Answer:
Answer rating: 100% (QA)
Step 11 Based on the information provided the breakeven price for the special job can be calculated ... View the full answer
Related Book For
Modern Advanced Accounting in Canada
ISBN: 978-1259087554
7th edition
Authors: Hilton Murray, Herauf Darrell
Posted Date:
Students also viewed these accounting questions
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
I really would like to know the steps idk how to start this buttrying to look for the gross pays has been frustrating, pleasehelp! Each of the following workers is piece-rate workers at Golden Boats...
-
The following information pertains to Satellite Company: Required: Present the operating activities section of the statement of cash flows for Satellite Company using the indirectmethod. Income...
-
A normal population has a mean of $60 and standard deviation of $12. You select random samples of nine. a. Apply the central limit theorem to describe the sampling distribution of the sample mean...
-
Explain the meaning and importance of supply chain management (SCM).
-
(Dollar-Value LIFO) Sisko Company has used the dollar-value LIFO method for inventory cost determination for many years. The following data were extracted from Sisko?s records. Calculate the index...
-
What is the value of the net worth of this company on November 24, 2021, the date when these items were posted on its accounting books? $90,000 net worth of equipment, machines, and office furniture...
-
On June 1, John Sullivan opened a real estate office in Hamilton called Sullivan Realty. The following transactions were completed for the month of June. Note that facsimile documents have been...
-
In December, Mellie's Parfum's planned to sell 800 bottles of perfume but actually sold 900 bottles. Mellie Grant, the owner of the company, is reviewing the Flexible Budget Performance Report. The...
-
Write a UML diagram for a Cat class. Your cat has 3 attributes: name (i.e. Tobey) which is a String breed which is the type of cat it is (i. e. Himalayan Sealpoint), also a String gender which is a...
-
Which expression below properly illustrates the syntax required to check if the variable saleAmount contains a value greater than 1000 but less than 5000? Group of answer choices saleAmount > 1000 ||...
-
create a Queue. (alternately you can create a list and simply implement enqueue and dequeue functions in the List - that will technically make it a queue). You will fill the first list with numbers...
-
Instruction Create a native application for Android that allows the user to store and manage tasks. Your application should allow user to create tasks by category that user chooses (work, school,...
-
Show how to do simple math operations to int values. The values of int x and int y will be asked for in the console when you run the application yourself. You will have to put in two numbers you want...
-
Owen A and Buyer B are old friends, and they purchase a property in Darwin together. The title reflects they are joint tenants. Owner A contributed 20% of the purchase deposit monies and Buyer B...
-
From the choice of simple moving average, exponential smoothing, and linear regression analysis, which forecasting technique would you consider the most accurate? Why? please write it in word...
-
What is the purpose of IFRS 8 on Operating Segments?
-
What sort of reconciliations is required for segmented reporting?
-
The equity method records dividends as a reduction in the investment account. Explain why.
-
Stephen Wernet has claimed that resources are the crucial link between operation and survival and that organizations change only when they experience a significant shift in resources. Do you agree or...
-
If you could interview any historical figure who contributed to the development of the U.S. nonprofit sector, who would you choose, and why? What three questions would you most like to ask this...
-
A social agency based in a midwestern city that provides mental health services has an annual budget of $80 million, funded almost exclusively by government contracts. Is an organization of this...
Study smarter with the SolutionInn App