snet sales the same a Connect xC Chegg.com × C Secure https://newconnect.mheduca

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snet sales the same a Connect xC Chegg.com × C Secure https://newconnect.mheducation.com/flow/connect.html Help Save& Exit Submit mework 7 6 Check my work 12 Calla Company produces skateboards that sell for $57 per unit. The company currently has the capacity to produce 90000 skateboards per year, but is selling 81,300 skateboards per year Annual costs for 81,300 skateboards follow 845,520 Direct materialts Direct labor Overhead Selling expenses Administrative expenses Total costs and expenses 945,000 546,800 3,395,888 A new retail store has offered to buy 8,700 of its skat from Callas regular customers and would not affect regular sales. A study of its costs in anticipation of this additional business reveals the following: for $52 per unit. The store is in a different market Print Direct materials and direct labor are 100% variable. . 40 percent of overhead is fixed at any production level from 81,300 units to 90000 units; the remaining 60% blerenes of annual overhead costs are variable with respect to volume. Selling expenses are 70% variable with respect to number of units sold, and the other 30% of selling expenses are fixed There will be an additional $3.00 per unit selling expense for this order Administrative expenses would increase by a $950 fixed amount Required: Prepare a three-column comparative income statement that reports the following a. Annual income without the special order. b. Annual income from the special order c. Combined annual income from normal business and the new business. (Do not round your intermediate calculations. Round your cost and expenses to nearest whole number.) CALLA C COMPARATIVE INCOME STATEMENTS AddtionalCombined Total Normal Volume Additional Volume Voume Costs and expenses Type here to search

Explanation / Answer

Normal Volume Additional Volume Combined Total Sales 4634100 452400 5086500 (81300*57) (8700*52) Less:Expenses Direct material (Note:1) 845520 90480 936000 Direct labor (Note:2) 585360 62640 648000 Overhead (Note:3) 945000 60639 1005639 Selling expenses (Note:4) 546000 66990 612990 Administrative expenses (Note:5) 474000 950 474950 Total cost and expenses 3395880 281699 3677579 Net income 1238220 170701 1408921 Notes: 1. Direct material cost Direct material cost are 100 % variable Cost per unit=845520/81300=$10.4 per unit For additional volume, Direct material=8700*10.4=90480 2. Direct labor cost Direct labor cost are 100 % variable Cost per unit=585360/81300=$7.2 per unit For additional volume, Direct material=8700*7.2=62640 3. Overhead cost Overhead cost are 60% variable Variable overhead cost per unit=(945000*60%)/81300=6.97 For additional volume, Overhead=8700*6.97=60639 4.Selling expense Selling expenses are 70% variable Variable selling expenses per unit=(546000*70%)/81300=4.70 Additional expenses=$3 per unit For additional volume, Overhead=(8700*4.70)+(8700*3)=66990

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