Ch07 adj Werner Jones Mgt Acctg PP97 2003

The special price is below the the normal cost per

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ner/Jones 7 ­ 21 LO4 Gather Relevant Information • At first glance, the order appears At to be an unacceptable offer. • The special price is below the The normal cost per unit of $130. ©2009 Michael Werner and Kumen Jones, Introduction to Management Accounting, 3e Werner/Jones 7 ­ 22 LO4 Gather Relevant Information Alumafloat Special order units Special selling price Per Unit Total 1 1,000 $ 125 $125,000 Direct material costs Direct labor costs Variable production costs Total relevant costs Total increase in profit $ (50) (55) (10) ($115) $ 10 ©2009 Michael Werner and Kumen Jones, Introduction to Management Accounting, 3e Werner/Jones $ (50,000) (55,000) (10,000) ($115,000) $ 10,000 7 ­ 23 LO4 Special Order Final Analysis • Although the special order price is below Although the normal full cost per unit, Alumafloat can experience a $10,000 increase in operating profit this period by accepting the special order. ©2009 Michael Werner and Kumen Jones, Introduction to Management Accounting,...
View Full Document

Ask a homework question - tutors are online