Question

Martin Company incurred the following costs for 60,000 units: Variable costs   $420,000 Fixed costs          392,000 Martin...

Martin Company incurred the following costs for 60,000 units:

Variable costs   $420,000

Fixed costs          392,000

Martin has received a special order from a foreign company for 3,000 units. There issufficient capacity to fill the order without jeopardizing regular sales. Filling the order will require spending an additional $6,300 for shipping.

If Martin wants to break even on the order, what should the unit sales price be?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Variable cost to be incurred for the offer = ($4,20,000 / 60,000 units) X 3,000 units
= $       21,000
Additional Fixed cost = $         6,300
Total Cost incurred for the offer = Variable cost to be incurred for the offer + Additional Fixed cost
= $21,000 + $6,300
= $       27,300
Unit Sales Price (Break even) = Total Cost incurred for the offer / 3,000 units
= $27,300 / 3,000 units
= $            9.10
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
Martin Company incurred the following costs for 70,000 units: Variable costs $420,000 Fixed costs   392,000 Martin...
Martin Company incurred the following costs for 70,000 units: Variable costs $420,000 Fixed costs   392,000 Martin has received a special order from a foreign company for 3,000 units at $8.4 per unit. There is sufficient capacity to fill the order without jeopardizing regular sales. Filling the order will require spending an additional $6,300 for shipping. Required: Should Martin Company accept this special order? Show your analysis (5 points)
It costs Garrison Company $13.10 of variable and $8.80 of fixed costs to produce one bathroom...
It costs Garrison Company $13.10 of variable and $8.80 of fixed costs to produce one bathroom scale which normally sells for $23.30. A foreign wholesaler offers to purchase 1,700 scales at $9.50 each. Garrison will incur special shipping costs of $2.60 per scale if the order is accepted. Garrison has sufficient unused capacity to accommodate the order. If the special order is accepted, what will be the effect on net income? Decrease of $10,540 Decrease of $11,730 Increase of $10,540...
A company incurred $80,000 of common fixed costs and $120,000 of common variable costs. These costs...
A company incurred $80,000 of common fixed costs and $120,000 of common variable costs. These costs are to be allocated to Departments A and B. Data on capacity provided and capacity used are as follows: Capacity Provided Capacity Used Department in Hours in Hours A 400 320 B 240 320 Assume that both fixed and variable costs are allocated on the basis of capacity used. The fixed and variable costs allocated to Department A are Fixed Variable a. $50,000 $75,000...
It costs Bramble Corp. $12 of variable and $5 of fixed costs to produce one bathroom...
It costs Bramble Corp. $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 1900 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted. Bramble has sufficient unused capacity to produce the 1900 scales. If the special order is accepted, what will be the effect on net income? $28500 increase $3800 increase $3800 decrease $5700 decrease...
In year 1 Frodo Company has variable costs of $80 per unit, total fixed costs of...
In year 1 Frodo Company has variable costs of $80 per unit, total fixed costs of $200,000, and a break-even point of 5,000 units. If the company raises the sales price per unit by $10 the following year, how many units must Frodo Company sell to break even in Year 2? A. 3,000 units B. 4,000 units C. 6,000 units D. 5,000 units
At Bargain Electronics, it costs $29 per unit ($20 variable and $9 fixed) to make an...
At Bargain Electronics, it costs $29 per unit ($20 variable and $9 fixed) to make an MP3 player at full capacity that normally sells for $44. A foreign wholesaler offers to buy 3,020 units at $24 each. Bargain Electronics will incur special shipping costs of $2 per unit. Assuming that Bargain Electronics has excess operating capacity, indicate the net income (loss) Bargain Electronics would realize by accepting the special order. (Enter negative amounts using either a negative sign preceding the...
At the end of the year, a company offered to buy 4,580 units of a product...
At the end of the year, a company offered to buy 4,580 units of a product from X Company for $11.00 each instead of the company's regular price of $19.00 each. The following income statement is for the 60,000 units of the product that X Company has already made and sold to its regular customers: Sales $1,140,000    Cost of goods sold    491,400    Gross margin $648,600    Selling and administrative costs      150,000    Profit $498,600    For the year, fixed cost of goods sold...
rief Exercise 20-03 At Bargain Electronics, it costs $30 per unit ($20 variable and $10 fixed)...
rief Exercise 20-03 At Bargain Electronics, it costs $30 per unit ($20 variable and $10 fixed) to make an MP3 player that normally sells for $45. A foreign wholesaler offers to buy 3,000 units at $25 each. Bargain Electronics will incur special shipping costs of $3 per unit. Assuming that Bargain Electronics has excess operating capacity, indicate the net income (loss) Bargain Electronics would realize by accepting the special order. (Enter negative amounts using either a negative sign preceding the...
Martin Incorporated provided the following information regarding its only​ product: Sale price per unit ​$50.00 Direct...
Martin Incorporated provided the following information regarding its only​ product: Sale price per unit ​$50.00 Direct materials used $161,000 Direct labor incurred $190,000 Variable manufacturing overhead $123,000 Variable selling and administrative expenses $70,000 Fixed manufacturing overhead ​$65,000 Fixed selling and administrative expenses ​$12,000 Units produced and sold 20,000 Assume no beginning inventory Assuming there is excess​ capacity, what would be the effect on operating income of accepting a special order for 1,300 units at a sale price of $ 49...
Given the following data: Sales (in units) 60,000 Selling price per unit 25 Manufacturing costs per...
Given the following data: Sales (in units) 60,000 Selling price per unit 25 Manufacturing costs per unit: Materials 5 Direct labor 4 Overhead Variable 4 Fixed 6 Total 19 Gross margin 6 Selling and admin. Expenses per unit 2 Operating income 4 A company in a foreign market offer to buy and the offer specifies the following data units to be sold 10,000 price per unit 13.01 Should the company sell this special order?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT