Pardo Company produces a single product and has capacity to produce 105,000 units per month. Costs...
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Pardo Company produces a single product and has capacity to produce 105,000 units per month. Costs to produce its current monthly sales of 84,000 units follow. The normal selling price of the product is $108 per unit. A new customer offers to purchase 21,000 units for $63.90 per unit. If the special offer is accepted, there will be no additional fixed overhead and no additional fixed general and administrative costs. The special offer would not affect its normal sales. Direct materials Direct labor Variable overhead Fixed overhead Foxed general and administrative Totals (0) Compute the income from the special offer (b) Should the company accept the special offer? Per Unit $12.50 15.00 13.00 17.50 13.00 $71.00 Costs at 84,000 Units $1,050,000 1,260,000 1,092,000 1,470,000 1,092,000 $5,964,000 Pardo Company produces a single product and has capacity to produce 105,000 units per month. Costs to produce its current monthly sales of 84,000 units follow. The normal selling price of the product is $108 per unit. A new customer offers to purchase 21,000 units for $63.90 per unit. If the special offer is accepted, there will be no additional fixed overhead and no additional fixed general and administrative costs. The special offer would not affect its normal sales. Direct materials Direct labor Variable overhead Fixed overhead Foxed general and administrative Totals (0) Compute the income from the special offer (b) Should the company accept the special offer? Per Unit $12.50 15.00 13.00 17.50 13.00 $71.00 Costs at 84,000 Units $1,050,000 1,260,000 1,092,000 1,470,000 1,092,000 $5,964,000
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Related Book For
Managerial Accounting
ISBN: 978-1259024900
9th canadian edition
Authors: Ray Garrison, Theresa Libby, Alan Webb
Posted Date:
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