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ID: 2534708 • Letter: T
Question
ttps://mybusinesscourse.com/platform/mod/quiz/attempt.php?attempt-18117688page-S&scrollpos-370t;#q6 E Menu Speical Order Soni, LTD produces wall mounts for flat panel television sets. The forecasted income statement for 2017 is as follows: SONI, LTD Budgeted Income Statement For the Year 2017 Sales (S 44 per unit) Cost of good sold (S 36 per unit) Gross proft Selling expenses (s 3 per unit) Net income 54,400,000 (3,600,000) 800,000 (300,000) $ 500,000 Additional Information (1) Of the production costs and selling expenses. $800.000 and $100.000, respectively, are fixed. (2) Soni, LTD received a special order from a hospital supply company offering to buy 12500 wall mounts for $30. If it accepts the order. there will be no additional selling expenses, and there is currently sufficient excess capacity to fill the order. The company's sales manager argues for rejecting the order because "we are not in the business of paying $36 to make a product to sell for $30." Calculate the current production volume is 100,000 units x The variable production cost are $ 2,800,000 F9 F10 F1 12 3 F5Explanation / Answer
Present variable production cost = 3600000-800000 = 2800000
Variable production cost per unit = 2800000/100000 = 28 per unit
Variable production cost for special order is = 28*12500 = 350000
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