The Little Buddy Bench Press Company makes family friendly fitness equipment. They recently received an offer...
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The Little Buddy Bench Press Company makes family friendly fitness equipment. They recently received an offer to sell 514 customized kiddo-planks to a Planet Mall Fitness for $24 per kiddo-plank. The company has capacity to fill the order. The average costs for kiddo-plank are: Direct Materials Direct Labor Variable Manufacturing Overhead Variable Selling Expenses Fixed Manufacturing Overhead Total Cost per Plank $4 9 5 3 4 $25 The custom order will incur no variable selling expenses. However, due to a special logo needing to be embossed on each product, the direct materials expense will increase by $9 per plank. How much will the profit of the company increase or decrease if they decide to accept the offer? Enter a net decrease as a negative number (ie. -4000). Enter a net increase as a positive number (ie. 4000). Round your answer to the whole dollar. The Little Buddy Bench Press Company makes family friendly fitness equipment. They recently received an offer to sell 514 customized kiddo-planks to a Planet Mall Fitness for $24 per kiddo-plank. The company has capacity to fill the order. The average costs for kiddo-plank are: Direct Materials Direct Labor Variable Manufacturing Overhead Variable Selling Expenses Fixed Manufacturing Overhead Total Cost per Plank $4 9 5 3 4 $25 The custom order will incur no variable selling expenses. However, due to a special logo needing to be embossed on each product, the direct materials expense will increase by $9 per plank. How much will the profit of the company increase or decrease if they decide to accept the offer? Enter a net decrease as a negative number (ie. -4000). Enter a net increase as a positive number (ie. 4000). Round your answer to the whole dollar.
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To calculate the change in profit if the company accepts the offer we need to compare the profit bef... View the full answer
Related Book For
Management Accounting
ISBN: 9780730369387
4th Edition
Authors: Leslie G. Eldenburg, Albie Brooks, Judy Oliver, Gillian Vesty, Rodney Dormer, Vijaya Murthy, Nick Pawsey
Posted Date:
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