Camino Company manufactures designer to-go coffee cups. Each line of coffee cups is endorsed by a...
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Camino Company manufactures designer to-go coffee cups. Each line of coffee cups is endorsed by a high-profile celebrity and designed with special elements selected by the celebrity. During the most recent year, Camino Company had the following operating results while operating at 7Qercent (70,000 units) of its capacity: Sales revenue S840,000 Cost of goods sold Gross profit Operating expenses Net operating incone 332,500 5507,500 26,250 5481,250 Camino's cost of goods sold and operating expenses are 80 percent varlable and 20 percent fixed. Camino has recelved an offer from a professional wrestling association to design a coffee cup endorsed by its biggest star and produce 22,000 cups for $9 each (total $198,000). These cups would be sold at wrestling matches throughout the United States. Acceptance of the order would require a $44,000 endorsement fee to the wrestling star, but no other increases in fixed operating expenses. Required: 1. Complete the incremental analysis of the special order in the table provided below. 2. Should Comino accept this special order? 3. If Camino were operating at full capacity, what price would Camino require for the special order? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Complete the incremental analysis of the special order in the table provided below. (Enter per unit answers to 2 decimal places.) Per cup Total Incremental Revenue Less: Incremental Costs Variable COGS Variable Operating Expenses Endorsement Fee Incremental Profit Required 1 Required 2 Required 3 Should Camino accept this special order? OYes ONo Required 1 Required 2 Required 3 If Camino were operating at full capacity, what price would Camino require for the special order? Price per Cup Camino Company manufactures designer to-go coffee cups. Each line of coffee cups is endorsed by a high-profile celebrity and designed with special elements selected by the celebrity. During the most recent year, Camino Company had the following operating results while operating at 7Qercent (70,000 units) of its capacity: Sales revenue S840,000 Cost of goods sold Gross profit Operating expenses Net operating incone 332,500 5507,500 26,250 5481,250 Camino's cost of goods sold and operating expenses are 80 percent varlable and 20 percent fixed. Camino has recelved an offer from a professional wrestling association to design a coffee cup endorsed by its biggest star and produce 22,000 cups for $9 each (total $198,000). These cups would be sold at wrestling matches throughout the United States. Acceptance of the order would require a $44,000 endorsement fee to the wrestling star, but no other increases in fixed operating expenses. Required: 1. Complete the incremental analysis of the special order in the table provided below. 2. Should Comino accept this special order? 3. If Camino were operating at full capacity, what price would Camino require for the special order? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Complete the incremental analysis of the special order in the table provided below. (Enter per unit answers to 2 decimal places.) Per cup Total Incremental Revenue Less: Incremental Costs Variable COGS Variable Operating Expenses Endorsement Fee Incremental Profit Required 1 Required 2 Required 3 Should Camino accept this special order? OYes ONo Required 1 Required 2 Required 3 If Camino were operating at full capacity, what price would Camino require for the special order? Price per Cup
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Answer rating: 100% (QA)
1 Per Cup Total 22000 Incremental Revenue 9 198000 Less ... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0078025518
2nd edition
Authors: Stacey Whitecotton, Robert Libby, Fred Phillips
Posted Date:
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