Kanada Inc. currently produces a product with the following cost characteristics: Item Plant capacity Current product/sales...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Kanada Inc. currently produces a product with the following cost characteristics: Item Plant capacity Current product/sales volume Selling price Variable cost-production Variable cost-selling and administrative Total fixed costs Amount 42,750 units 35,500 units $85 31.50 12.50 $929,000 A customer approaches Kanada Inc. for a special one-time order to purchase 10,250 units. 65% of current variable selling and administrative costs would be incurred with this order. Kanada Inc. will also have to purchase a special machine which will only be used on this order at a cost of $69,750. Assuming Kanada Inc. would purchase the machine, what is the minimum acceptable per unit price for this order? Kanada Inc. currently produces a product with the following cost characteristics: Item Plant capacity Current product/sales volume Selling price Variable cost-production Variable cost-selling and administrative Total fixed costs Amount 42,750 units 35,500 units $85 31.50 12.50 $929,000 A customer approaches Kanada Inc. for a special one-time order to purchase 10,250 units. 65% of current variable selling and administrative costs would be incurred with this order. Kanada Inc. will also have to purchase a special machine which will only be used on this order at a cost of $69,750. Assuming Kanada Inc. would purchase the machine, what is the minimum acceptable per unit price for this order?
Expert Answer:
Answer rating: 100% (QA)
To calculate the minimum acceptable per unit price for the special onetime order we need to consider ... View the full answer
Related Book For
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura
Posted Date:
Students also viewed these accounting questions
-
A small company has developed an improved process for making solar panels. The company needs to set its prices and wants those prices to ref lect the efficiencies of producing larger batches. The...
-
A. Construct a 3 to 5-year strategic plan that is related to a specified health care organization of your choice. The organization may be not-for-profit or for-profit. Complete a SWOT analysis, and...
-
The Ottawa Valley Instrument Company (OVIC) consists of the Semiconductor Division and the Process-Control Division, each of which operates as an independent profit centre. The Semiconductor Division...
-
What are the costs of healthcare, where does the money come from, and where is it spent?
-
During a tennis match, a player serves the ball at 23.6 m/s, with the center of the ball leaving the racquet horizontally 2.37 m above the court surface. The net is 12 m away and 0.90 m high. When...
-
Reread the Operations in practice piece at the beginning of the chapter on Taxing quality which describes the improvement initiative carried out by the Aarhus Region customs and tax unit. (a) How...
-
What are examples of different types of systems?
-
Englehart Company sells two types of pumps. One is large and is for commercial use. The other is smaller and is used in residential swimming pools. The following inventory data is available for the...
-
Determine f(-2) Determine f(2) Find all x for which f(x)=-1 Find all x for which f(x)= -3 Find y-intercepts Determine the range. Use the graph of y = f(x) to answer the following. -4 -3 -2 -1 4- 3...
-
You are a lead auditor from ABC Auditors Pty Ltd. Your client is Cassey's Quality Cars Ltd who are a large car dealership with branches across Queensland. ABC Auditors have performed audits for past...
-
Suzy Q lives in Dallas, Texas, but she dies in Austin, Texas. Which probate court will likely have jurisdiction over her estate? Suzy Q leaves behind a will that leaves all of her property to her...
-
Assume that Iowa Co. will receive 1,200,000 Mexican pesos in 180 days. The Mexican interest rate is 3% over 180 days and the US rate is 2% over the same period. The spot rate for the Mexican peso is...
-
A 0.012-kg bullet, traveling at 850 m/s, hits a 2-kg block of wood that is initially at rest, and goes straight through it. Assume that the final velocity of the bullet relative to the block is 400...
-
FIFO and LIFO costs under perpetual inventory system The following units of an item were available for sale during the year: Beginning inventory 22 units at $44 Sale 18 units at $62 First purchase 18...
-
Martin Company applies manufacturing overhead based on direct labor hours. Information concerning manufacturing overhead and labor for the year is as follows: Actual manufacturing overhead Estimated...
-
6. You are considering buying a new car. The car will cost $16,000. You plan on financing the car over 5 years. Your interest rate will be 5.9%. You will be making monthly payments. What will your...
-
Yesterday, Berryman Investments was selling for $75 per share. Today, the company completed a 7-for-2 stock split. If the total market value was unchanged by the split. What is the price of the stock...
-
The figure shows a bolted lap joint that uses SAE grade 8 bolts. The members are made of cold-drawn AISI 1040 steel. Find the safe tensile shear load F that can be applied to this connection if the...
-
Collins Company has the following data for the Assembly Department for August: Units in process at the beginning of August........ 300 Units started in August................1,800 Units completed and...
-
One subunit of Zone Sports Company had the following financial results last month: Requirements 1. Complete the performance evaluation report for this subunit (round to two decimal places). 2. Based...
-
You recently began a job as an accounting intern at Reed Golf Park. Your first task was to help prepare the cash budget for April and May. Unfortunately, the computer with the budget file crashed,...
-
The dot-com crash began on 10 March 2000. (a) Plot the price of Microsoft shares and the associated log returns. Verify that the biggest falls in the share price occurs in April 2000 where there is a...
-
(a) Compute the monthly excess returns on Exxon, General Electric, Gold, IBM, Microsft and Walmart. Be particularly carefully when computing the correct risk free rate to use. (b) Estimate the CAPM...
-
(a) Compute the percentage monthly return on equities and dividends. Plot the two returns and interpret their time series patterns. (b) Estimate an \(\mathrm{AR}(6)\) model of equity returns....
Study smarter with the SolutionInn App