Question 24

P7-1. What is the variable COGS associated with accepting the order?

Group of answer choices

$200,000

$190,000

$220,000

$210,000

Flag question: Question 25

P7-2. What is the sales price per unit if CISCO is purchased from a supplier?

Group of answer choices

$10

$12

$6

$8

Flag question: Question 26

P8-1. What is the total cost per unit with a budgeted volume of 80,000 units?

Group of answer choices

$110

$105

$100

$95

Flag question: Question 27

P8-2. What is the total cost per unit with a budgeted volume of 50,000 units?

Group of answer choices

$135

$125

$130

$140

Flag question: Question 28

P8-3. What is the rate charged per hour of labor?

Group of answer choices

$41.50

$37.00

$36.50

$38.00

Flag question: Question 29

P8-4. What is the minimum transfer price on part (a)?

Group of answer choices

$0.03

$0.05

$0.01

$0.07

Flag question: Question 30

P8-5. What is the minimum transfer price on part (a)?

Group of answer choices

$20

$16

$18

$22

Flag question: Question 31

P8-6. What is the minimum transfer price on part (a)?

Group of answer choices

$130.90

$125.80

$117.50

$120.25

Use incremental analysis for special order and identify nonfinancial factors in the decision. P7.1 (LO 2), E Writing ThreePoint Sports Inc. manufactures basketballs for the Women's National Basketball Association (WNBA). For the first 6 months of 2022, the company reported the following operating results while operating at 80% of plant capacity and producing 120,000 units. Amount Sales $4,800,000 Cost of goods sold 3,600,000 Selling and administrative expenses 405,000 Net income 795,000 Fixed costs for the period were cost of goods sold $960,ooo, and selling and administrative expenses $225,000. In July, normally a slack manufacturing month, ThreePoint Sports receives a special order for 10,000 basketballs at $28 each from the Greek Basketball Association (GBA). Acceptance of the order would increase variable selling and administrative expenses $0.75 per unit because of shipping costs but would not increase fixed costs and expenses. Instructions a. Prepare an incremental analysis for the special order. a. NI increase $37,500 b. Should ThreePoint Sports Inc. accept the special order? Explain your answer. c. What is the minimum selling price on the special order to produce net income of $5.00 per ball? d. What nonfinancial factors should management consider in making its decision? Use incremental analysis related to make or buy, consider opportunity cost, and identify nonfinancial factors. P7.2 (LO 3), E Writing The management of Shatner Manufacturing Company is trying to decide whether to continue manufacturing a part or to buy it from an outside supplier. The part, called CISCO, is a component of the company's finished product. The following information was collected from the accounting records and production data for the year ending December 31, 2022. 1. 8,000 units of CISCO were produced in the Machining Department. 2. Variable manufacturing costs applicable to the production of each CISCO unit were: direct materials $4.80, direct labor $4.30, indirect labor $0.43, utilities $0.40. 3. Fixed manufacturing costs applicable to the production of CISCO were: Cost Item Direct Allocated Total Depreciation $2,100 $ 900 $3,000 Property taxes 500 200 700 Insurance 900 600 1,500 $3,500 $1,700 $5,200 All variable manufacturing and direct fixed costs will be eliminated if CISCO is purchased. Allocated costs will not be eliminated if CISCO is purchased. So if CISCO is purchased, the fixed manufacturing costs allocated to CISCO will have to be absorbed by other production departments. 4. The lowest quotation for 8,ooo CISCO units from a supplier is $80,000. 5. If CISCO units are purchased, freight and inspection costs would be $0.35 per unit, and receiving costs totaling $1,300 per year would be incurred by the Machining Department. Instructions a. Prepare an incremental analysis for CISCO. Your analysis should have columns for (1) Make CISCO, (2) Buy CISCO, and (3) Net Income Increase/(Decrease). a. NI (decrease) $(1,160)\f\f\f