Answers to Practice Problems for Chapter 8

Answers to Practice Problems for Chapter 8 - only leaves...

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The University of Texas at Austin McCombs School of Business, Business Foundations Program ACC 310F: Foundations of Accounting Answers to Practice Problems for Chapter 8 1. Zip-It, Inc. Per Unit Regular Business Special Order Sales (10,500 units) 35 367,500 45,000 Cloth and zippers 20 210,000 30,000 Direct labor 7 73,500 10,500 Factory rent 31,500 0 Factory utilities 0.5 5,250 750 Net income 47,250 3,750 2. Air Ball Sporting Goods The order cannot be fulfilled without modification to order timing or plant capacity. Capacity equals 100,000 units (Sales 4,500,000 / $50 price equals current volume of 90,000; 90,000 volume / .90 capacity = 100,000 units for 100% capacity) since the current volume is 90,000 units that
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Unformatted text preview: only leaves room for 10,000 units. 3. Roland Inc. Make Buy Direct Materials (40,000 x $4) $160,000 Direct Labor (40,000 x $6) 240,000 Variable Overhead (75% x $160,000) 120,000 Fixed Overhead 40,000 $30,000 Purchase Price (40,000 x $13.50) 540,000 Total Cost $560,000 $570,000 4. Park Company Old Truck New Truck Lease Initiation Fee 300 Monthly Lease Payment 36,000 41,400 Early Cancellation Fee 1,000 Fuel 5,625 3,750 Total 41,625 46,450 Page 1 Page 2...
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Answers to Practice Problems for Chapter 8 - only leaves...

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