Question

Waterways mass-produces a special connector unit that it normally sells for $4.10. It sells approximately 34,100...

Waterways mass-produces a special connector unit that it normally sells for $4.10. It sells approximately 34,100 of these units each year. The variable costs for each unit are $2.50. A company in Canada that has been unable to produce enough of a similar connector to meet customer demand would like to buy 16,500 of these units at $2.80 per unit. The production of these units is near full capacity at Waterways, so to accept the offer from the Canadian company would require temporarily adding another shift to its production line. To do this would increase variable manufacturing costs by $0.30 per unit. However, variable selling costs would be reduced by $0.20 a unit.

An irrigation company has asked for a special order of 2,000 of the connectors. To meet this special order, Waterways would not need an additional shift, and the irrigation company is willing to pay $3.30 per unit.
Your answer is partially correct. Try again.
What are the consequences of Waterways agreeing to provide the 16,500 units to the Canadian company? Would this be a wise “special order” to accept?
Waterways

shouldshould not

accept the special order because net income

decreasesincreases

by $ .

LINK TO TEXT

LINK TO TEXT

LINK TO TEXT
Your answer is partially correct. Try again.
Should Waterways accept the special order from the irrigation company?
Waterways

should notshould

accept the special order because net income

increasesdecreases

by $ .

LINK TO TEXT

LINK TO TEXT

LINK TO TEXT
Your answer is partially correct. Try again.
What would be the consequences of accepting both special orders?
Accepting both special orders would

increasedecrease

net income by $ .
Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Please finish part 1 (a) Show your work how to get that number and type your...
Please finish part 1 (a) Show your work how to get that number and type your answer(no hand writing plz) Waterways Corporation is considering various business opportunities. It wants to make the best use of its production facilities to maximize income. This problem asks you to help Waterways do incremental analysis on these various opportunities. Part 1 Waterways mass-produces a special connector unit that it normally sells for $3.90. It sells approximately 35,000 of these units each year. The variable...
Special Order Lorraine manufactures a single product with the following full unit costs for 3,000 units:...
Special Order Lorraine manufactures a single product with the following full unit costs for 3,000 units: Direct materials $80 Direct labor 40 Manufacturing overhead (40% variable) 120 Selling expenses 40 Administrative expenses (10% variable)     20 Total per unit $300 A company recently approached Lorraine with a special order to purchase 500 units for $300. Lorraine currently sells the models to dealers for $550. Capacity is sufficient to produce the extra 1,000 units. No selling expenses would be incurred on...
ABC Company produces a single unit that it sells for $20 per unit. ABC has the...
ABC Company produces a single unit that it sells for $20 per unit. ABC has the capacity to produce 28,000 units each month. ABC is currently selling 19,000 units each month. The costs associated with each unit appears below: direct materials $5.00 direct labor 2.50 variable overhead 1.00 fixed overhead 1.50 variable selling costs 4.00 fixed selling costs 0.75 ABC Company has received a special order from a customer who wants to purchase 18,000 units at a reduced price of...
Special-Order Decision Rianne Company produces a light fixture with the following unit cost: Direct materials $2...
Special-Order Decision Rianne Company produces a light fixture with the following unit cost: Direct materials $2 Direct labor 1 Variable overhead 3 Fixed overhead 2    Unit cost $8 The production capacity is 300,000 units per year. Because of a depressed housing market, the company expects to produce only 180,000 fixtures for the coming year. The company also has fixed selling costs totaling $500,000 per year and variable selling costs of $1 per unit sold. The fixtures normally sell for $12...
Naylor Company had $151,600 of net income in 2016 when the selling price per unit was...
Naylor Company had $151,600 of net income in 2016 when the selling price per unit was $152, the variable costs per unit were $92, and the fixed costs were $574,500. Management expects per unit data and total fixed costs to remain the same in 2017. The president of Naylor Company is under pressure from stockholders to increase net income by $62,000 in 2017. Collapse question part (a) Correct answer. Your answer is correct. Compute the number of units sold in...
A manufacturing Corporation has received a request for a special order of 10,000 units of a...
A manufacturing Corporation has received a request for a special order of 10,000 units of a product for $20.00 each. Product A90's unit product cost is $21.75, determined as follows: Direct materials $ 8.00 Direct labor (variable cost) 5.00 Variable manufacturing overhead 2.25 Fixed manufacturing overhead 6.50 Unit product cost $ 21.75 The customer would like modifications made to the product that that would require an investment of $40,000 in special molds that would have no salvage value. This special...
Elfalan Corporation produces a single product. The cost of producing and selling a single unit of...
Elfalan Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 44,000 units per month is as follows: Per Unit Direct materials $ 44.60 Direct labor $ 8.50 Variable manufacturing overhead $ 1.50 Fixed manufacturing overhead $ 18.10 Variable selling & administrative expense $ 2.60 Fixed selling & administrative expense $ 12.00 The normal selling price of the product is $94.10 per unit. An order has...
Elfalan Corporation produces a single product. The cost of producing and selling a single unit of...
Elfalan Corporation produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 47,000 units per month is as follows: Per Unit Direct materials $ 46.10 Direct labor $ 8.80 Variable manufacturing overhead $ 1.80 Fixed manufacturing overhead $ 18.70 Variable selling & administrative expense $ 3.20 Fixed selling & administrative expense $ 15.00 The normal selling price of the product is $100.10 per unit. An order has...
PROBLEM 6–22 Special Order Decisions LO6–4 Polaski Company manufactures and sells a single product called a...
PROBLEM 6–22 Special Order Decisions LO6–4 Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 30,000 Rets per year. Costs associated with this level of production and sales are given below: Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . . Direct labor . . . . . . . ....
Question 1 Maize Company incurs a cost of $34.18 per unit, of which $19.42 is variable,...
Question 1 Maize Company incurs a cost of $34.18 per unit, of which $19.42 is variable, to make a product that normally sells for $58.68. A foreign wholesaler offers to buy 5,200 units at $31.11 each. Maize will incur additional costs of $1.09 per unit to imprint a logo and to pay for shipping. Compute the increase or decrease in net income Maize will realize by accepting the special order, assuming Maize has sufficient excess operating capacity. (Enter negative amounts...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT