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E. Boone Products had the following unit costs: Direct materials £24; Direct labour £10; Variable factory overhead £8; Fixed factory overhead (allocated) £10. A one-time customer has offered to buy 3,000. Because of capacity constraints, 1,500 units will need to be produced during overtime. Overtime premium is £10 per unit. The additional profit (loss) that will be generated by accepting the special order is

F. Boone Products had the following unit costs: Direct materials £24; Direct labour £10; Variable factory overhead £8; Fixed factory overhead (allocated) £18. A one-time customer has offered to buy 2,000 units at a special price of £48 per unit. Because of capacity constraints, 1,000 units will need to be produced during overtime. Overtime premium is £7 per unit. The additional profit (loss) that will be generated by accepting the special order is


G. Reggie Ltd. manufactures a single product with the following unit costs for 1,000 units: Direct materials £2,400; Direct labour £960; Factory overhead (30% variable) £1,800; Selling expenses (50% variable) £900; Administrative expenses (10% variable) £840; Total per unit £6,900. Recently, a company approached Reggie Ltd. about buying 100 units for £5,100 each. Currently, the models are sold to dealers for £7,800. Reggie Ltd.'s capacity is sufficient to produce the extra 100 units. No additional selling expenses would be incurred on the special order. If Reggie Ltd. wants to increase its profit by £20,000 on the special order, the minimum price it should charge per unit is



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Hubert Koch
Hubert KochLv2
30 Sep 2019

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Boone Products had the following unit costs: Direct materials £24; Direct labour £10; Variable factory overhead £8; Fixed factory overhead (allocated) £18. A one-time customer has offered to buy 2,000 units at a special price of £48 per unit. Because of capacity constraints, 1,500 units will need to be produced during overtime. Overtime premium is £7 per unit. The additional profit (loss) that will be generated by accepting the special order is

Select one:

a. cannot be determined.

b. £4,000 loss

c. £1,500 loss

d. £5,000 profit

e. £1,500 profit

If contribution per unit is £36 and total fixed costs is £9,000. In order to obtain a before-tax profit of £14,000 the company needs to sell-

Select one:

a. 456 units

b. 639 units

c. 333 units

d. 350 units

e. 875 units

K. Reggie Ltd. manufactures a single product with the following unit costs for 1,000 units: Direct materials £2,400; Direct labour £960; Factory overhead (30% variable) £1,800; Selling expenses (70% variable) £900; Administrative expenses (10% variable) £840; Total per unit £6,900. Recently, a company approached Reggie Ltd. about buying 200 units for £5,500 each. Currently, the models are sold to dealers for £7,800. Reggie Ltd.'s capacity is sufficient to produce the extra 200 units. No additional selling expenses would be incurred on the special order. If Reggie Ltd. wants to increase its profit by £20,000 on the special order, the minimum price it should charge per unit is

I. Boone Products had the following unit costs: Direct materials £24; Direct labour £10; Variable factory overhead £8; Fixed factory overhead (allocated) £18. A one-time customer has offered to buy 2,000 units at a special price of £48 per unit. Because of capacity constraints, 1,500 units will need to be produced during overtime. Overtime premium is £7 per unit. The additional profit (loss) that will be generated by accepting the special order is

J. The following per unit information relates to a product produced by Creamer Company: Direct materials £30, Direct labour £15, Variable overhead £30, Fixed overhead £18. Fixed selling costs are £500,000 per year, and variable selling costs are £12 per unit sold. Although production capacity is 600,000 units per year, the company expects to produce only 400,000 units next year. The product normally sells for £120 each. A customer has offered to buy 60,000 units for £90 each.The incremental cost associated with the special order is

K. The following per unit information relates to a product produced by Creamer Company: Direct materials £30, Direct labour £15, Variable overhead £30, Fixed overhead £20. Fixed selling costs are £500,000 per year, and variable selling costs are £15 per unit sold. Although production capacity is 600,000 units per year, the company expects to produce only 400,000 units next year. The product normally sells for £120 each. A customer has offered to buy 60,000 units for £90 each.The incremental revenue associated with the special order is

Miller Company produces speakers for home stereo units. The speakers are sold to retail stores for £30. Variable costs per unit are: Direct materials £9.00; Direct labour 4.50; Distribution 1.50 and Variable Factory overhead 3.00. Fixed costs per month are: Factory overhead £120,000 and Selling and admin. 60,000. The variable distribution costs are for transportation to the retail stores. The current production and sales volume is 20,000 per year. Capacity is 25,000 units per year. An Atlanta wholesaler has proposed to place a special one-time order for 7,000 units at a special price of £25.20 per unit. The wholesaler would pay all distribution costs, but there would be additional fixed selling and administrative costs of £6,000. In addition, assume that overtime production is not possible and that allother information remains the same as the original data. The effect on profits if the special order is accepted is

Select one:

a. cannot be determined

b. £30,900 decrease

c. £50,100 increase

d. £30,900 increase

e. £50,100 decrease

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