3.2 apr%2027%20ch08%20extra%20egs.ppt

3.2 apr%2027%20ch08%20extra%20egs.ppt - ACIS222 Chapter 8...

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ACIS222 Chapter 8 Extra Examples
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Ch8egs- Ch8egs- 2 Special order: Wright Company Special order: 3 800 units @ $7.50 each no effect on existing sales Production information: normally production: 12 000 units this year's production/sales: 8 000 normal sales price: $12 per unit
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Ch8egs- Ch8egs- 3 Unit costs: Direct materials $2.00 Direct labour $3.10 Variable overhead $1.80 Fixed overhead $2.00 Total $8.90 sufficient excess capacity
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Ch8egs- Ch8egs- 4 Required 1. Should Wright accept the special order? 2. Suppose that Wright’s distribution centre at the warehouse is operating at full capacity and would need to add capacity costing $1 000 for every 5 000 units to be packed and shipped. Should Wright accept the special order?
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Ch8egs- Ch8egs- 5 Solution: Wright Company 1. Selling price Less relevant costs: Increase in profits x units ordered Total increase in profits
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Ch8egs- Ch8egs- 6 Keep or drop: Blackfoot Company A B C Total $000 $000 $000 $000 Sales 800 1 950 200 2 950
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3.2 apr%2027%20ch08%20extra%20egs.ppt - ACIS222 Chapter 8...

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