Danso Air Compressor Sdn Bhd making air compressors for a local market, Selling price Direct Material...

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Danso Air Compressor Sdn Bhd making air compressors for a local market, Selling price Direct Material Direct Labor Manufacturing Overhead Fixed Costs RM300 per unit RM100 per unit RM25 per unit RM25 per unit RM50 per unit The regular production is 10,000 units per month. The maximum production is 15,000 units per month. Required If a foreign company place an order for 5,000 units of compressor at a price of RM200 per unit; i. Determine if Danso Air Compressor Sdn Bhd accept the special order ii. Briefly explain others factors to be considered when making special order decision Due to the declining popularity of clutch handbag, Bonica Bhd has not reported a profit for several years. An income statement for last year follows: General factory overhead Salary of product line manager Depreciation of equipment** Product line advertising Rent-factory space*** Segment Statement of Profit and Loss-Clutch handbag Sales Less variable expenses: Variable manufacturing costs Variable shipping costs Commissions Contribution margin Less fixed expenses: RM 120,000 5,000 75,000 60,000 90,000 50,000 100,000 70,000 30,000 RM 500,000 200.000 300,000 General administrative expense* 400,000 Net operating loss (100,000) Allocated common costs that would be redistributed to other product lines if clutch handbag were dropped. This equipment has no resale value and does not wear out through use. The clutch handbag are manufactured in their own facility. Danso Air Compressor Sdn Bhd making air compressors for a local market, Selling price Direct Material Direct Labor Manufacturing Overhead Fixed Costs RM300 per unit RM100 per unit RM25 per unit RM25 per unit RM50 per unit The regular production is 10,000 units per month. The maximum production is 15,000 units per month. Required If a foreign company place an order for 5,000 units of compressor at a price of RM200 per unit; i. Determine if Danso Air Compressor Sdn Bhd accept the special order ii. Briefly explain others factors to be considered when making special order decision Due to the declining popularity of clutch handbag, Bonica Bhd has not reported a profit for several years. An income statement for last year follows: General factory overhead Salary of product line manager Depreciation of equipment** Product line advertising Rent-factory space*** Segment Statement of Profit and Loss-Clutch handbag Sales Less variable expenses: Variable manufacturing costs Variable shipping costs Commissions Contribution margin Less fixed expenses: RM 120,000 5,000 75,000 60,000 90,000 50,000 100,000 70,000 30,000 RM 500,000 200.000 300,000 General administrative expense* 400,000 Net operating loss (100,000) Allocated common costs that would be redistributed to other product lines if clutch handbag were dropped. This equipment has no resale value and does not wear out through use. The clutch handbag are manufactured in their own facility.

Answer rating: 100% (QA)

To determine whether Danso Air Compressor Sdn Bhd should accept the special order for 5000 units at a price of RM200 per unit we need to consider the ... View the full answer