Problem 1

Zee has the following data: regular production and sales per year (at 90% capacity) 90,000 units; Total fixed cost of 200,000; Total variable cost of 504,000; regular selling price per unit is 20 per unit. A one time special order was received for 15,000 units for a special offer price of 15 per unit.

What should be the minimum acceptable price?

a. 15.00

b. 10.40

c. 15.20

d. 20.00

e. None of the above

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Problem 2

Ace has the following data: regular production and sales per year (at 90% capacity) 90,000 units; Total fixed cost of 200,000; Total variable cost of 504,000; regular selling price per unit is 20 per unit. A one time special order was received for 15,000 units for a special offer price of 15 per unit.

Decide whether to accept or reject the special order?

a. Accept

b. Reject

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Problem 3

X produce part X (10,000 units is needed per month) and incurred the following:

Direct Material is 5 per unit; Direct Labor is 5 per unit; and total overhead cost of 30 per unit. The 20% of Overhead is fixed cost. Handling cost is 10% of Direct Material used. The part can be purchased from outsider at 36 per unit. The plant used in making the product X will be vacant when purchased form outsider, BUT it can be rented out to other companies at 40,000 per month and 2/3 of Fixed Overhead will be avoided.

What is the disadvantage of decision to make?

a. 30,000

b. 55,000

c. Zero

d. 65,000

e. None of the above

**** please provide solution/computation for each problem. it would be a big help thank you so much ****