Jordan Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Jordan Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an Inexpensive calculator. The company's chief accountant recently prepared the following income statement showing annual revenues and expenses associated with the segment's operating activities. The relevant range for the production and sale of the calculators is between 37,000 and 71,000 units per year. Revenue (38,000 units * $11.00) Unit-level variable costs Materials cost (38,000 x $3.00) Labor cost (38,000 × $2.00) Manufacturing overhead (38,000 $0.10) Shipping and handling (38,000 x $0.25) Sales commissions (38,00e0 × $2.00) Contribution margin Fixed expenses Advertising costs Salary of production supervisor Allocated companywide facility-level expenses Net loss. Complete this question by entering your answers in the tabs below. $ 418,000 (114,000) (76,000) (3,800) Required a. A large discount store has approached the owner of Jordan about buying 7,000 calculators. It would replace The Math Machine's label with its own logo to avoid affecting Jordan's existing customers. Because the offer was made directly to the owner, no sales commissions on the transaction would be involved, but the discount store is willing to pay only $5.60 per calculator. Calculate the contribution margin from the special order. Based on quantitative factors alone, should Jordan accept the special order? b-1. Jordan has an opportunity to buy the 38,000 calculators It currently makes from a reliable competing manufacturer for $6.30 each. The product meets Jordan's quality standards. Jordan could continue to use its own logo, advertising program, and sales force to distribute the products. Calculate the total cost for Jordan to make and buy the 38,000 calculators. Contribution margin (loss) Should Jordan accept the special order? (9,500) (76,000) 138,700 b-2. Should Jordan buy the calculators or continue to make them? b-3. Should Jordan buy the calculators or continue to make them, If the volume of sales were increased to 71,000 units? c. Because the calculator division is currently operating at a loss, should it be eliminated from the company's operations? Support your answer with appropriate computations. Specifically, by what amount would the segment's elimination Increase or decrease profitability? Req C (27,000) (67,000) (82,000) $ (37,300) Req A Req B1 Req B2 Req 83 A large discount store has approached the owner of Jordan about buying 7,000 calculators. It would replace The Math Machine's label with its own logo to avoid affecting Jordan's existing customers. Because the offer was made directly to the owner, no sales commissions on the transaction would be involved, but the discount store is willing to pay only $5.60 per calculator. Calculate the contribution margin from the special order. Based on quantitative factors alone, should Jordan accept the special order? Note: Negative amount should be indicated by a minus sign. Show less A Jordan Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an Inexpensive calculator. The company's chief accountant recently prepared the following income statement showing annual revenues and expenses associated with the segment's operating activities. The relevant range for the production and sale of the calculators is between 37,000 and 71,000 units per year. Revenue (38,000 units * $11.00) Unit-level variable costs Materials cost (38,000 x $3.00) Labor cost (38,000 × $2.00) Manufacturing overhead (38,000 $0.10) Shipping and handling (38,000 x $0.25) Sales commissions (38,00e0 × $2.00) Contribution margin Fixed expenses Advertising costs Salary of production supervisor Allocated companywide facility-level expenses Net loss. Complete this question by entering your answers in the tabs below. $ 418,000 (114,000) (76,000) (3,800) Required a. A large discount store has approached the owner of Jordan about buying 7,000 calculators. It would replace The Math Machine's label with its own logo to avoid affecting Jordan's existing customers. Because the offer was made directly to the owner, no sales commissions on the transaction would be involved, but the discount store is willing to pay only $5.60 per calculator. Calculate the contribution margin from the special order. Based on quantitative factors alone, should Jordan accept the special order? b-1. Jordan has an opportunity to buy the 38,000 calculators It currently makes from a reliable competing manufacturer for $6.30 each. The product meets Jordan's quality standards. Jordan could continue to use its own logo, advertising program, and sales force to distribute the products. Calculate the total cost for Jordan to make and buy the 38,000 calculators. Contribution margin (loss) Should Jordan accept the special order? (9,500) (76,000) 138,700 b-2. Should Jordan buy the calculators or continue to make them? b-3. Should Jordan buy the calculators or continue to make them, If the volume of sales were increased to 71,000 units? c. Because the calculator division is currently operating at a loss, should it be eliminated from the company's operations? Support your answer with appropriate computations. Specifically, by what amount would the segment's elimination Increase or decrease profitability? Req C (27,000) (67,000) (82,000) $ (37,300) Req A Req B1 Req B2 Req 83 A large discount store has approached the owner of Jordan about buying 7,000 calculators. It would replace The Math Machine's label with its own logo to avoid affecting Jordan's existing customers. Because the offer was made directly to the owner, no sales commissions on the transaction would be involved, but the discount store is willing to pay only $5.60 per calculator. Calculate the contribution margin from the special order. Based on quantitative factors alone, should Jordan accept the special order? Note: Negative amount should be indicated by a minus sign. Show less A
Expert Answer:
Answer rating: 100% (QA)
To solve the questions we need to analyze the provided information and perform relevant calculations Lets tackle each requirement one by one a To calculate the contribution margin from the special ord... View the full answer
Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 978-1259569197
8th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor Yi Tsay, Philip Olds
Posted Date:
Students also viewed these accounting questions
-
Comprehensive problem including special order, outsourcing, and segment elimination decisions Huffman Corporation makes and sells state-of-the-art electronics products. One of its segments produces...
-
McKay Inc. makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an inexpensive calculator. The company's chief accountant recently prepared the...
-
Lang Corporation makes and sells state-of-the-art electronics products. One of its segments produces The Math Machine, an inexpensive calculator. The companys chief accountant recently prepared the...
-
Here are the supply and demand equations for throstles, where p is the price in dollars: D (p) = 40 p S (p) = 10+p. On the axes below, draw the demand and supply curves for throstles, using blue...
-
On January 14, Mountain Rocks Inc., a marble contractor, issued for cash 24,000 shares of $25 par common stock at $32, and on March 17, it issued for cash 60,000 shares of $10 par preferred stock at...
-
ASSIGNMENT: Create a Canadian Resume and a Cover Letter for a job posting that you have researched on- line. Research on-line and find a job that you would like to work at and pretend to apply to a...
-
What is the working principle of an electrodynamic transducer?
-
On December 31, 2010, Jarnigan Co. estimated that 2% of its net sales of $400,000 will become uncollectible. The company recorded this amount as an addition to Allowance for Doubtful Accounts. On May...
-
1. Starting from home, you bicycle 23km north in 2.4 hand then turn around and pedal straight home in 1.4h. What are your (a) displacement at the end of the first 2.4h, (Express your answer using...
-
(a) A homogeneous solid body of arbitrary shape is initially at temperature T, throughout. At t = 0 it is immersed in a fluid medium of temperature T. Let L be a characteristic length in the solid....
-
Let S(A) be the number of sales when A thousand dollars are spent on advertising given by S(A) = 1500 + 250 In(A) (where In(A) is the logarithmic term) How much was spent on advertising if sales...
-
You are the new controller for Moonlight Bay Resorts. The company CFO has asked you to determine the company's interest expense for the year ended December 31, 2024. Your accounting group provided...
-
Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations: Variable costs per unit: Manufacturing: Direct materials...
-
During Heaton Company's first two years of operations, it reported absorption costing net operating income as follows: Sales (@$63 per unit) Cost of goods sold (@ $36 per unit) Year 1 $ 1,008,000...
-
Kingbird Company's ledger shows the following balances on December 31, 2025. $201,000 6% Preferred stock-$10 par value, outstanding 20,100 shares Common stock-$100 par value, outstanding 31,700...
-
Laker Company reported the following January purchases and sales data for its only product. The Company uses a periodic inventory system. For specific identification, ending inventory consists of 214...
-
Purple Battery Sdn Bhd makes and sells a single product and the following forecast information is available for the year ending 31 March 2021. Direct materials Cost per unit produced RM 20 Direct...
-
In exchange for land, the company received a 12-month note on January 1. The face amount of the note is $1,000, and the stated rate of interest is 13%, compounded annually. The 13% rate is equal to...
-
Presented here are selected data from the 10-K reports of four companies for their 2015 fiscal years. The four companies, in alphabetical order, are: Caterpillar, Inc., a company that manufactures...
-
During 2018, Blue Ridge Corporation reported after-tax net income of $4,150,000. During the year, the number of shares of stock outstanding remained constant at 15,000 of $100 par, 9 percent...
-
This problem covers concepts that were presented in Chapters 11 and 12 concerning job-order costing systems. Custom Automobile Restoration Shop (CARS) is a small shop dedicated to high-quality...
-
An analysis by Professor Peter M Rothwell and his colleagues (Nuffield Department of Clinical Neuroscience, University of Oxford, UK) published in 2012 in the medical journal The Lancet...
-
Suppose a student is interested in knowing the preferred holiday destinations of the faculty members in their university. They are affiliated to the college of business and interview a few of the...
-
The following table shows the result of the 2018 General Elections in Pakistan, along with the vote share predicted by several organizations in the days before the elections. The sample sizes were...
Study smarter with the SolutionInn App