Varto Company has 11,000 units of its product in inventory that it produced last year at a cost of $159,000. This year's model is better than last year's, and the 11,000 units cannot be sold at last year's normal selling price of $39 each. Varto has two alternatives for these units: (1) They can be sold as is to a wholesaler for $110,000 or (2) they can be processed further at an additional cost of $260,900 and then sold for $363,000. (a) Prepare a sell as is or process further analysis of income effects. (b) Should Varto sell the products as is or process further and then sell them? (a) Sell or Process Analysis Revenue Costs Income Incremental income (loss) to sell as is (b) The company should: $ Sell As Is 0 $ Process Further 0

Varto Company has 11,000 units of its product in inventory that it produced last year at a cost of $159,000. This year's model is better than last year's, and the 11,000 units cannot be sold at last year's normal selling price of $39 each. Varto has two alternatives for these units: (1) They can be sold as is to a wholesaler for $110,000 or (2) they can be processed further at an additional cost of $260,900 and then sold for $363,000. (a) Prepare a sell as is or process further analysis of income effects. (b) Should Varto sell the products as is or process further and then sell them? (a) Sell or Process Analysis Revenue Costs Income Incremental income (loss) to sell as is (b) The company should: $ Sell As Is 0 $ Process Further 0

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 6BE

See similar textbooks

Similar questions

k ht ences Exercise 23-5 (Algo) Sell or process LO P2 Varto Company has 9,000 units of its product in inventory that it produced last year at a cost of $155,000. This year's model is better than last year's, and the 9,000 units cannot be sold at last year's normal selling price of $50 each. Varto has two alternatives for these units: (1) They can be sold as is to a wholesaler for $126,000 or (2) they can be processed further at an additional cost of $132,800 and then sold for $252,000. (a) Prepare a sell as is or process further analysis of income effects. (b) Should Varto sell the products as is or process further and then sell them? (a) Sell or Process Analysis Revenue Costs Income Incremental income (loss) to sell as is (b) The company should: Sell As Is Process Further
Exercise 23-5 (Algo) Sell or process LO P2 Varto Company has 12.200 units of its product in inventory that it produced last year at a cost of $156,000. This year's model is better than last year's, and the 12.200 units cannot be sold at last year's normal selling price of $41 each. Varto has two alternatives for these units ( They can be sold as is to a wholesaler for $109.800 or (2) they can be processed further at an additional cost of $312.100 and then sold for $414,800 (e) Prepare a sell as is or process further analysis of income effects (b) Should Varto sell the products as is or process further and then sell them? Sell or Process Analysis Cests Incremental income foss) to sell as is (b) The company should $ Sell Ass Sell as i 05 Process Forther
Accept Business at Special Price Product A is normally sold for $50 per unit. A special price of $32 is offered for the export market. The variable production cost is $24 per unit. An additional export tariff of 13% of revenue must be paid for all export products. Assume there is sufficient capacity for the special order. a. Prepare a differential analysis dated March 16 on whether to reject (Alternative 1) or accept (Alternative 2) the special order. If required, round your answers to two decimal places. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Reject Order (Alt. 1) or Accept Order (Alt. 2) March 16 Reject Order (Alternative 1) Accept Order (Alternative 2) Differential Effect on Income (Alternative 2) Revenues, per unit $fill in the blank 3f481bf3bf97fe8_1 $fill in the blank 3f481bf3bf97fe8_2 $fill in the blank 3f481bf3bf97fe8_3 Costs: Variable…
QUESTION 10 Randall has received a special order for 4300 units of its product at a special price of $20. The product normally sells for $34 and has the following manufacturing costs: AZ Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Per unit 2 3 3 2 Assume that Randall has sufficient capacity to fill the order. If Randall accepts the order, what effect will the order have on the company's short-term profit? *** If a decrease, place a sign before your answer. For example, a decrease of $1,000 would be answered -1,000.
Rylan Corporation received an offer from an exporter for 25,000 units of product at $16 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price $22 Unit manufacturing costs: Variable 11 Fixed 6 What is the amount of the income or loss from acceptance of the offer? a. $125,000 loss b. $125,000 income c. $25,000 loss d. $25,000 income
Stryker Industries received an offer from an exporter for 24,000 units of product at $18 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data is available: Domestic unit sales price $21 Unit manufacturing costs: Variable 11 Fixed 6 What is the amount of income or loss from acceptance of the offer? a.$168,000 b.$264,000 c.$504,000 d.$432,000
Accept Business at Special Price Product A is normally sold for $47 per unit. A special price of $30 is offered for the export market. The variable production cost is $25 per unit. An additional export tariff of 16% of revenue must be paid for all export products. Assume there is sufficient capacity for the special order. a. Prepare a differential analysis dated March 16 on whether to reject (Alternative 1) or accept (Alternative 2) the special order. If required, round your answers to two decimal places. If an amount is zero, enter "0". Differential Analysis Reject Order (Alt. 1) or Accept Order (Alt. 2) March 16 Reject Acсept Differential Order Order Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues, per unit Costs: Variable manufacturing costs, per unit Export tariff, per unit Profit (loss), per unit $ b. Should the special order be rejected (Alternative 1) or accepted (Alternative 2)?
Accept Business at Special Price Product A is normally sold for $9.60 per unit. A special price of $7.20 is offered for the export market. The variable production cost is $5.00 per unit. An additional export tariff of 15% of revenue must be paid for all export products. Assume there is sufficient capacity for the special order. a. Prepare a differential analysis dated March 16 on whether to reject (Alternative 1) or accept (Alternative 2) the special order. Round your answers to two decimal places. If an amount is zero, enter "0". Differential Analysis Reject Order (Alt. 1) or Accept Order (Alt. 2) March 16 RejectOrder(Alternative 1) AcceptOrder(Alternative 2) DifferentialEffects(Alternative 2) Revenues, per unit Costs: Variable manufacturing costs, per unit Export tariff, per unit Profit (loss), per unit b. Should the special order be rejected (Alternative 1) or accepted (Alternative 2)?
Accept Business at Special Price Product A is normally sold for $9.60 per unit. A special price of $7.20 is offered for the export market. The variable production cost is $5.00 per unit. An additional export tariff of 15% of revenue must be paid for all export products. Assume there is sufficient capacity for the special order. a. Prepare a differential analysis dated March 16 on whether to reject (Alternative 1) or accept (Alternative 2) the special order. Round your answers to two decimal places. If an amount is zero, enter "0". Revenues, per unit Costs: Differential Analysis Reject Order (Alt. 1) or Accept Order (Alt. 2) March 16 Variable manufacturing costs, per unit Export tariff, per unit Profit (loss), per unit Reject Accept Order Order (Alternative 1) (Alternative 2) (Alternative 2) $7.20 ✓ $ 7.20 X X X X 5.00 1.08 Differential Effects 1.12 b. Should the special order be rejected (Alternative 1) or accepted (Alternative 2)? Accept the special order 5.00 1.08 1.12
Homework, Chapter 25 Accept Business at Special Price Product A is normally sold for $50 per unit. A special price of $30 is offered for the export market. The variable production cost is $26 per unit. An additional export tariff of 13% of revenue must be paid for all export products. Assume there is sufficient capacity for the special order. a. Prepare a differential analysis dated March 16 on whether to reject (Alternative 1) or accept (Alternative 2) the special order. If required, round your answers to two decimal places. If an amount is zero, enter "0". Differential Analysis Reject Order (Alt. 1) or Accept Order (Alt. 2) March 16 Reject Accept Differential Order Order Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues, per unit Costs: Variable manufacturing costs, per unit Export tariff, per unit Profit (loss), per unit b. Should the special order be rejected (Alternative 1) or accepted (Alternative 2)?
Accept Business at Special Price A product is normally sold for $50 per unit. A special price of $33 is offered for the export market. The variable production cost is $25 per unit. An additional export tariff of 13% of revenue must be paid for all export products. Assume there is sufficient capacity for the special order. a. Prepare a differential analysis dated December 15 on whether to reject (Alternative 1) or accept (Alternative 2) the special order. If required, round your answers to two decimal places. If an amount is zero, enter "0". Line Item Description Revenues, per unit Costs: Differential Analysis Reject (Alt. 1) or Accept (Alt. 2) Order December 15 Variable manufacturing costs, per unit Export tariff, per unit Profit (loss), per unit Reject Accept Order Differential Effects Order (Alternative 1) (Alternative 2) (Alternative 2) b. Should the special order be rejected (Alternative 1) or accepted (Alternative 2)?
Accept Business at Special Price Product D is normally sold for $42 per unit. A special price of $35 is offered for the export market. The variable production cost is $26 per unit. An additional export tariff of 16% of revenue must be paid for all export products. Assume that there is sufficient capacity for the special order Prepare a differential analysis dated March 16, on whether to reject (Alternative 1) or accept (Alternative 2) the special order. If required, round your answers to two decimal places. If an amount is zero, enter "O". For those boxes in which you must enter subtracted or negative numbers use a minus sign Differential Analysis Reject Order (Alt. 1) or Accept Order (Alt. 2) March 16 Differential Effect Accept Order Reject Order (Alternative 1) (Alternative 2) on Income (Alternative 2) 35 35 Revenues, per unit Costs: 26 X 26 X 26 Variable manufacturing costs, per unit X 5.60 5.60 Export tariff, per unit 3.40 3.40 Income (Loss), per unit X