Can someone help me with the answers to this homework question. Thank you HW Sco

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Can someone help me with the answers to this homework question.

Thank you

HW Score: 0%, 0 of 10 | | lot 6 (0 complete) score: 0 of 1 pt TI8-1 (book/static) Assume that Campbel s soup plant is running at 90% of its monthly capacity Cam bers has us received a special order to produce a ,000 cases o chi Question Hep en noodle s for amati al su a et The ne nano t selthe oup under its own private brand label The soup wl be the same in all respects except for the label which will cost Campbell's an extra $5,000 in total to design. The supermarket has offered to pay only $19.00 per case, which is well under Campbell's normal sales price Costs at the current production level (450,000 cases) are as follows (Click the icon to view the table ) Data Table 1. Is there enough excess capacity to fill this order? 2. Will Campbell's operating income increase or decrease if it accepts this special order? By how much? Total Cost Cost per Case (450,000 cases) 1. Is there enough excess capacity to fill this order? lf the la t is producing 450 000 cases a month yet only operating at 90% of capacity. it must have a capacity level of cases per month. This means the plant has excess capacity of cases per month there is enough capacity to fil this special order Direct Materials 4,500,000 1,350,000 900,000 2,700,000 5 9450,000 Direct Labor Variable MOH Fixed MOH Total s 10.00 3.00 2.00 600 S 2100 Print Done Choose from any list or enter any number in the input fields and then click Check Answer Check Answer Clear All 9-59 PM O Type here to search

Explanation / Answer

1.If the plant is producing 450,000 cases a month, yet only operating at 90% of capacity, it must have a capacity level of 500,000 cases per month. This means the plant has excess capacity of 50,000 cases a month. YES there is enough capacity to fill the special order.

note:

given that 450,000 cases equal to 90%.

so total capacity = 450,000 / 90% =>500,000 cases.

excess capacit= 500,000 cases - 450,000 =>50,000 cases.

special order is for 40,000 cases which is less than 50,000 cases excess capacity.

2.Campbell's operating income will increase by $160,000.

calculation:

note: fixed costs are not relavant and are to be ignored.

since fixed costs are not relevant the contribution will alone be the amount by which operating income will increase.

price offered $19 less: direct materials ($10) direct labour ($3) variable MOH ($2) contribution per unit $4 total contribution ($4*40,000) $160,000

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