Business
Business, 10.08.2021 21:30, catherine51

Calla Company produces skateboards that sell for $53 per unit. The company currently has the capacity to produce 95,000 skateboards per year, but is selling 81,300 skateboards per year. Annual costs for 81,300 skateboards follow. Direct materials $829,260
Direct labor 674,790
Overhead 951,000
Selling expenses 552,000
Administrative expenses 465,000
Total costs and expenses $3,483,150

A new retail store has offered to buy 13,100 of its skateboards for $55 per unit. The store is in a different market from Calla's regular customers and would not affect regular sales. A study of its costs in anticipation of this additional business reveals the following:

• Direct materials and direct labor are 100% variable.
• 40 percent of overhead is fixed at any production level from 81,900 units to 95,000 units; the remaining 60% of annual overhead costs are variable with respect to volume.
• Selling expenses are 70% variable with respect to number of units sold, and the other 30% of selling expenses are fixed.
• There will be an additional $2.4 per unit selling expense for this order.
• Administrative expenses would increase by a $970 fixed amount.

Required:
Prepare a three-column comparative income statement that reports the following:
a. Annual income without the special order.
b. Annual income from the special order.
c. Combined annual income from normal business and the new business.

answer
Answers: 3

Other questions on the subject: Business

image
Business, 22.06.2019 07:40, tipbri6380
(a) what was the opportunity cost of non-gm food for many buyers before 2008? (b) why did they prefer the alternative? (c) what was the opportunity cost in 2008? (d) why did it change?
Answers: 3
image
Business, 22.06.2019 16:50, tayveon122
Identify and describe a variety of performance rating scales that can be used in organizations including graphical scales, letter scales, and numeric scales.
Answers: 2
image
Business, 23.06.2019 00:30, Nerdylearner8639
Kim davis is in the 40 percent personal tax bracket. she is considering investing in hca(taxable) bonds that carry a 12 percent interest rate. what is her after- tax yield(interest rate) on the bonds?
Answers: 1
image
Business, 23.06.2019 01:00, robert7248
The monthly demand equation for an electric utility company is estimated to be p equals 60 minus left parenthesis 10 superscript negative 5 baseline right parenthesis x, where p is measured in dollars and x is measured in thousands of killowatt-hours. the utility has fixed costs of $3 comma 000 comma 000 per month and variable costs of $32 per 1000 kilowatt-hours of electricity generated, so the cost function is upper c left parenthesis x right parenthesis equals 3 times 10 superscript 6 baseline plus 32 x. (a) find the value of x and the corresponding price for 1000 kilowatt-hours that maximize the utility's profit. (b) suppose that the rising fuel costs increase the utility's variable costs from $32 to $38, so its new cost function is upper c 1 left parenthesis x right parenthesis equals 3 times 10 superscript 6 baseline plus 38 x. should the utility pass all this increase of $6 per thousand kilowatt-hours on to the consumers?
Answers: 2
Do you know the correct answer?
Calla Company produces skateboards that sell for $53 per unit. The company currently has the capacit...

Questions in other subjects:

Konu
Mathematics, 08.07.2019 13:00
Konu
Mathematics, 08.07.2019 13:00
Konu
Mathematics, 08.07.2019 13:00
Konu
Mathematics, 08.07.2019 13:00