Bargain Electronics will incur special shipping costs of $4 per unit.
Assuming that Bargain Electronics has excess operating capacity,
indicate the net income (loss) Bargain Electronics would realize by
accepting the special order
Brief Exercise 20-4
Manson Industries incurs unit costs of $7 ($4 variable and $3 fixed) in
making an assembly part for its finished product. A supplier offers to
make 13,400 of the assembly part at $6 per unit. If the offer is
accepted, Manson will save all variable costs but no fixed costs.
Prepare an analysis showing the total cost saving, if any, Manson will
realize by buying the part
Brief Exercise 20-8
Lisah, Inc., manufactures golf clubs in three models. For the year, the
Big Bart line has a net loss of $5,500 from sales $200,000, variable
costs $176,000, and fixed costs $29,500. If the Big Bart line is
eliminated, $20,100 of fixed costs will remain. Prepare an analysis
showing whether the Big Bart line should be eliminated
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ACC 561 Week 6 Wileyplus Practice Quiz
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1. A major accounting contribution to the managerial decision-making
process in evaluating possible courses of actio n is to
2. In incremental analysis,
3. Incremental analysis is most useful
4. It costs Ross Co. $24 of variable and $10 of fixed costs to produce
one bathroom scale which normally sells for $70. A foreign
wholesaler offers to purchase 2,000 scales at $30 each. Ross would
incur special shipping costs of $2 per scale if the order were accepted.
Ross has sufficient unused capacity to produce the 2,000 scales. If the
special order is accepted, what will be the effect on net income?