Business, 03.03.2020 06:14 teed0ll9

Mohave Corp. makes several varieties of beach umbrellas and accessories. It has been approached by a company called Lost Mine Industries about producing a special order for a custom umbrella called the Ultimate Shade (US). The special-order umbrellas with the Lost Mine Company logo would be distributed to participants at an upcoming convention sponsored by Lost Mine. Lost Mine has offered to buy 2,800 of the US umbrellas at a price of $26 each. Mohave currently has the excess capacity necessary to accept the offer. The following information is related to the production of the US umbrella: Direct materials $ 11.00 Direct labor 6.00 Variable manufacturing overhead 7.50 Fixed manufacturing overhead 2.50 Total cost $ 27.00 Regular sales price $ 34.00 Required: 1. Compute the incremental profit (or loss) from accepting the special order. 2. Should Mohave accept the special order

Answers: 1

Show answers

Answers

Answer from: manarsadi6

The incremental profit is $4,200. Mohave should accept this order.

Explanation:

(1) Variable cost per unit = Direct materials + Direct labor + Variable manufacturing overhead

Variable cost per unit = $11 + $6 + $7.5 = $24.5

Incremental profit = (Sale price per unit - Variable cost per unit) x Units sold

Incremental profit = ($26 - $24.5) x 2,800 = $4,200

(2) Mohave should accept the special order because it is resulting in a profit for the business. We are also informed that Mohave has the excess capacity necessary to accept the order. Hence, no additional fixed costs are incurred in accepting the order, implying that it is overall a profitable transaction for Mohave which it should accept.

Answer from: vinp190p9zekn

1.Incremental loss = $2 800.

2.2. No. Mohave should not accept the special order as it will cost more to make than they would get back.

Explanation:

To make 2800 umbrellas would cost the company: $27 * 2800 units = $75 600.

If they sell them at the regular selling price, they would make: $34 * 2800 = $95 200.

At the special price of $26, they make: $26 * 2800 = $72 800.

Profit / Loss from the special order: $72 800 - $75 600 = - $2 800.

From the above calculations, it is evident that the company would run make a loss.

1.Incremental loss = $2 800.

2.2. No. Mohave should not accept the special order as it will cost more to make than they would get back.

Answer from: Quest

Secured loans are protected by collateral security. examples: title loans where the borrower uses the car title as collateral security interest rates are lower and repayments are longer therefore risk is low as a collateral security is given as guarantee to the bank in case of failure to pay the loanunsecured loans are not protected by collateral security but it is given on the creditworthiness of the borrower, trusting that she/he will pay on time. examples; payday loans is a short term loan where the borrower lends money from the bank and pays is back when the borrower receives his/her wages.interest rates are high and repayments are shorter. but the risk is high as no collateral security is given as a guarantee to the bank for payment of the loan

Answer from: Quest

12342 3fg sdfg 757767 54546636

Another question on Business

Business, 22.06.2019 01:30

Suppose the following items were taken from the balance sheet of nike, inc. (all dollars are in millions.) 1. cash $ 2,316.7 7. inventory $ 2,245.6 2. accounts receivable 2,786.2 8. income taxes payable 80.3 3. common stock 2,841.1 9. equipment 1,783.8 4. notes payable 291.2 10. retained earnings 6,162.5 5. buildings 3,959.7 11. accounts payable 2,624.6 6. mortgage payable 1,092.3 perform each of the following. classify each of these items as an asset, liability, or stockholdersâ€™ equity, and determine the total dollar amount for each classification. (enter amounts in millions up to 1 decimal place, e.g. 45.5 million.) cash accounts receivable common stock notes payable buildings mortgage payable inventory income taxes payable equipment retained earnings accounts payable assets $ 13092 liability $ 4088.4 stockholdersâ€™ equity $ 9003.6 etextbook and media determine nikeâ€™s accounting equation by calculating the value of total assets, total liabilities, and total stockholdersâ€™ equity. (enter amounts in millions up to 1 decimal place, e.g. 45.5 million.) total assets = total liabilities + total stockholdersâ€™ equity

Answers: 3

Answer

Business, 22.06.2019 03:00

How does having a flexible mind you become a better employee? a. it you become more honest toward work. b. it you become a team player. c. it you learn new things that will better your performance. d. it you to finish your work on time. e. it you reach work on time

Answers: 1

Answer

Business, 22.06.2019 09:40

Boone brothers remodels homes and replaces windows. ace builders constructs new homes. if boone brothers considers expanding into new home construction, it should evaluate the expansion project using which one of the following as the required return for the project?

Answers: 1

Answer

Business, 22.06.2019 11:00

Aprofessional does specialized work that's primarily: degree based. medical or legal. well paying. intellectual and creative

Answers: 2

Answer

You know the right answer?

Mohave Corp. makes several varieties of beach umbrellas and accessories. It has been approached by a...

Questions