Question: Benyamin Ltd. produces jewelry boxes and one of their products has the following selling price...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Question: Benyamin Ltd. produces jewelry boxes and one of their products has the following selling price and costs: Description Selling price Direct materials Direct labour Variable overhead Fixed overhead Sales commission Income per unit Dollar value per unit $60.00 $12.00 $10.80 $9.60 $8.40 $3.00 $16.20 The company also have some non-manufacturing fixed costs (such as sales and administration costs). They have provided the following details: Capacity (units) 25,000 Current production (units) 20,000 Fixed non-manufacturing costs (annual) | $81,000 Hellena Inc. is a new one-time customer who has offered to buy the following jewelry boxes: Hellena Inc. is a new one-time customer who has offered to buy the following jewelry boxes: Total units required Purchase price per unit Transportation costs / unit 3,750 $35.00 $1.20 Hellena Inc. has agreed to pay the transportation costs. In addition, because no sales person was involved, there will be no sales commission paid on the sale to Hellena Inc. Required: Use the above information to answer the following questions about this special order. Part A: If Benyamin Ltd. accepts this order, will operating income increase, decrease or stay the same? Enter IN for increase, DE for decrease, and NA for stay the same in the space provided. A Enter your answer as a positive number. Part B: Assume, INSTEAD, that the order from Hellena Inc. was obtained through a sales person so sales commission has to be paid. In addition, Hellena Inc. has asked Benyamin Ltd. to pay all transportation costs. Given this new information, will Benyamin's operating income increase, decrease or stay the same? Enter IN for increase, DE for decrease, and NA for stay the same in the space provided. A Given this new information, by how much will operating income change if the order was accepted now? Enter your answer as a positive number. A/ Question: Benyamin Ltd. produces jewelry boxes and one of their products has the following selling price and costs: Description Selling price Direct materials Direct labour Variable overhead Fixed overhead Sales commission Income per unit Dollar value per unit $60.00 $12.00 $10.80 $9.60 $8.40 $3.00 $16.20 The company also have some non-manufacturing fixed costs (such as sales and administration costs). They have provided the following details: Capacity (units) 25,000 Current production (units) 20,000 Fixed non-manufacturing costs (annual) | $81,000 Hellena Inc. is a new one-time customer who has offered to buy the following jewelry boxes: Hellena Inc. is a new one-time customer who has offered to buy the following jewelry boxes: Total units required Purchase price per unit Transportation costs / unit 3,750 $35.00 $1.20 Hellena Inc. has agreed to pay the transportation costs. In addition, because no sales person was involved, there will be no sales commission paid on the sale to Hellena Inc. Required: Use the above information to answer the following questions about this special order. Part A: If Benyamin Ltd. accepts this order, will operating income increase, decrease or stay the same? Enter IN for increase, DE for decrease, and NA for stay the same in the space provided. A Enter your answer as a positive number. Part B: Assume, INSTEAD, that the order from Hellena Inc. was obtained through a sales person so sales commission has to be paid. In addition, Hellena Inc. has asked Benyamin Ltd. to pay all transportation costs. Given this new information, will Benyamin's operating income increase, decrease or stay the same? Enter IN for increase, DE for decrease, and NA for stay the same in the space provided. A Given this new information, by how much will operating income change if the order was accepted now? Enter your answer as a positive number. A/
Expert Answer:
Answer rating: 100% (QA)
Part A Revenue from Special order Units x Price per unit 131250 375035 Le... View the full answer
Related Book For
Management Accounting
ISBN: 978-0132570848
6th Canadian edition
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu
Posted Date:
Students also viewed these accounting questions
-
LingYu Ltd. produces jewelry boxes for retail customers such as Walmart. One of their most popular products has the following selling price and costs: Dollar value Description per unit Selling price...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
The Crazy Eddie fraud may appear smaller and gentler than the massive billion-dollar frauds exposed in recent times, such as Bernie Madoffs Ponzi scheme, frauds in the subprime mortgage market, the...
-
When developing cost functions, which of the following statements is FALSE? A. Personal observations of costs and activities provide the best evidence of a plausible relationship between a cost and...
-
Refer to Arctic Cats statement of cash flows in Appendix A. What are its cash flows from financing activities for the year ended March 31, 2011? List the items and amounts.
-
A cast iron, T-type fitting is being produced for the oil drilling industry, using an air-set or no-bake sand for both the mold and the core. A silica sand has been used in combination with a...
-
Presented here is information for Eliason, Inc., for the year ended August 31,2010. Beginning: Assets. Liabilities... Ending: Assets....... Liabilities. Stockholders' Equity: Sale of Stock .............
-
In each of the following cases, identify whether the problem is adverse selection or moral hazard, and explain your answer. How might the problem be dealt with? a. Rick has gotten a large advance to...
-
As a local government department head, how knowledgeable should you be in the various financing options available for purchasing capital equipment? Explain your reasoning.
-
> A spring-mass system is a fundamental concept in physics and engineering that describes the dynamic behavior of a mass attached to a spring. This system is commonly used to model and analyze...
-
What is wrong (if anything) with each of the following statements? The Intermediate Run in macroeconomic modeling refers to a period of no longer than one year In the Intermediate Run, prices and...
-
Please analyze the variation of pressure distribution along the surface in the flow around a blunt object to find the minimum pressure coefficient.
-
Please give the formulation of the definite solution of the velocity potential function and the flow function for the potential flow problem around an object.
-
For an ideal incompressible potential flow, prove that the streamline is orthogonal to the equipotential line.
-
For incompressible plane flows, what is the relationship between flow function and vorticity?
-
Under what circumstances can the viscosity of the fluid be reflected? From the perspective of the transport properties of fluid movement, what kind of transport characteristics does fluid viscosity...
-
A container ship is a type of cargo ship that is specifically designed to transport standardized cargo containers. A standard average mass of each container is 1200 kg that has rectangular shape made...
-
The text defined intrinsic value as the value of an asset given a hypothetically complete understanding of the assets investment characteristics. Discuss why hypothetically is included in the...
-
Management of Consolidated Industries Inc. is considering closing its Oilfield Supply Manufacturing Division due to unfavourable and uncertain conditions in the oil markets. Each of the following...
-
Refer to 9-A3. 1. Suppose the decision model favoured by top management consisted of a comparison of a three-year accumulation of wealth under each alternative. Which alternative would you choose?...
-
Renovation Lighting Supply plans inventory levels (at cost) at the end of each month as follows: May, $275,000; June, $220,000; July, $200,000; and August, $240,000. Sales are expected to be June,...
-
What are generally accepted accounting principles (GAAP)?
-
Describe the concepts, principles and constraints underlying financial statements.
-
Accounting is the process of: (a) recognising, measuring, recording and communicating. (b) identifying, measuring, recording and communicating. (c) identifying, recording, classifying and...
Study smarter with the SolutionInn App