Question

Minor Electric has received a special one-time order for 1,500 light fixtures (units) at $5 per...

Minor Electric has received a special one-time order for 1,500 light fixtures (units) at $5 per unit. Minor currently produces and sells 7,500 units at $6.00 each. Minor has the capacity to produce 10,000 light fixtures. Production costs for these units are $4.50 per unit, which includes $3.00 of variable costs and $1.50 for fixed costs. To produce the special order, a new machine needs to be purchased at a cost of $1,000 with a zero salvage value. Management expects no other changes in costs to be incurred as a result of the additional production. If Minor accepts the special order its profit on this product line will be? Include both regular and special order sales in your calculation.

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Minor Electric has received a special one-time order for 600 light fixtures (units) at $8 per...
Minor Electric has received a special one-time order for 600 light fixtures (units) at $8 per unit. Minor currently produces and sells 3,000 units at $9.00 each. This level represents 75% of its capacity. Production costs for these units are $9.00 per unit, which includes $6.00 variable cost and $3.00 fixed cost. To produce the special order, a new machine needs to be purchased at a cost of $550 with a zero salvage value. Management expects no other changes in...
Minor Electric has received a special one-time order for 1,200 light fixtures (units) at $22 per...
Minor Electric has received a special one-time order for 1,200 light fixtures (units) at $22 per unit. Minor currently produces and sells 6,000 units at $23.00 each. This level represents 75% of its capacity. Production costs for these units are $30.00 per unit, which includes $20.00 variable cost and $10.00 fixed cost. To produce the special order, a new machine needs to be purchased at a cost of $900 with a zero salvage value. Management expects no other changes in...
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...
Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $3.10 per unit....
Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $3.10 per unit. Bluebird currently produces and sells 75,000 units at $7.10 each. This level represents 80% of its capacity. These bird feeders would be marketed under the wholesaler’s name and would not affect Bluebird’s sales through its normal channels. Production costs for these units are $3.65 per unit, which includes $2.30 variable cost and $1.35 fixed cost. If Bluebird accepts this additional business, the effect on...
Redbird Mfg. has received a special one-time order for 10,000 bird feeders at $25 per unit....
Redbird Mfg. has received a special one-time order for 10,000 bird feeders at $25 per unit. Redbird currently produces and sells 100,000 units at $30.00 each. These bird feeders would be marketed under the wholesaler's name and Redbird's managers estimate that sales through its normal channels would be reduced by 2,000 units. Production costs for all units are $17.50 per unit, which includes $12.50 in variable costs and $5.00 of fixed costs. Assume that Redbird has sufficient capacity to fill...
Cranberry has received a special order for 110 units of its product at a special price...
Cranberry has received a special order for 110 units of its product at a special price of $2,200. The product normally sells for $2,700 and has the following manufacturing costs: Per unit Direct materials $ 740 Direct labor 440 Variable manufacturing overhead 540 Fixed manufacturing overhead 640 Unit cost $ 2,360 Assume that Cranberry has sufficient capacity to fill the order without harming normal production and sales. If Cranberry accepts the order, what effect will the order have on the...
Capitol has received a special order for 2,000 units of its product at a special price...
Capitol has received a special order for 2,000 units of its product at a special price of $150. The product normally sells for $200 and has the following manufacturing costs:    Per unit Direct materials $ 50 Direct labor 30 Variable manufacturing overhead 20 Fixed manufacturing overhead 40 Unit cost $ 140 Assume that Capitol has sufficient capacity to fill the order without harming normal production and sales and all fixed overhead is unavoidable.   a. If Capitol accepts the order, what...
Marcy has received a special order for 2,700 units of its product at a special price...
Marcy has received a special order for 2,700 units of its product at a special price of $96. The product normally sells for $110 and has the following manufacturing costs: Per unit Direct materials $ 32 Direct labor 20 Variable manufacturing overhead 13 Fixed manufacturing overhead 7 Unit cost $ 72 Assume that Marcy has sufficient capacity to fill the order without harming normal production and sales and all fixed overhead is unavoidable. a. If Marcy accepts the order, what...
Suppose for example a business has received a special order of 3,000 units for one of...
Suppose for example a business has received a special order of 3,000 units for one of its products. The product normally sells at ₹8.00 but the customer has requested a price of ₹5.00. The unit product cost is ₹6.00 comprising direct material and labor costs of ₹3.50, variable overhead costs of ₹0.90 and fixed overhead costs of ₹1.60. The business has adequate capacity to manufacture additional 3,000 units. Could you help the firm to decide whether to accept or reject...
Exercise 12-9 Special Order Decision [LO12-4] Delta Company produces a single product. The cost of producing...
Exercise 12-9 Special Order Decision [LO12-4] Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company’s normal activity level of 87,600 units per year is: Direct materials $ 1.50 Direct labor $ 4.00 Variable manufacturing overhead $ 0.90 Fixed manufacturing overhead $ 4.75 Variable selling and administrative expenses $ 1.80 Fixed selling and administrative expenses $ 3.00 The normal selling price is $25.00 per unit. The company’s capacity is...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT