ACC 560 Week 5 Homework Chapter 7 and 8

Aug 8th, 2016
Studypool Tutor
University of Phoenix
Price: $25 USD

Tutor description

Chapter 7: Exercises 3, 7, and 11 Chapter 8: Exercises 2, 6, and 9 E7-3 Moonbeam Company manufactures toasters. For the first 8 months of 2017, the company reported the following operating results while operating at 75% of plant capacity: a. Prepare an incremental analysis for the special order. E7-7 Riggs Company purchases sails and produces sailboats. It currently produces 1,200 sailboats per year, operating at normal capacity, which is about 80% of full capacity. Riggs purchases sails at $250 each, but the company is considering using the excess capacity to manufacture the sails instead. The manufacturing cost per sail would be $100 for direct materials, $80 for direct labor, and $90 for overhead. The $90 overhead is based on $78,000 of annual fixed overhead that is allocated using normal capacity. The president of Riggs has come to you for advice. “It would cost me $270 to make the sails,” she says, “but only $250 to buy them. Should I continue buying them, or have I missed some

Word Count: 1199
Showing Page: 1/6
Chapter 7: Exercises 3, 7, and 11Chapter 8: Exercises 2, 6, and 9E7-3 Moonbeam Company manufactures toasters. For the first 8 months of 2017, thecompany reported the following operating results while operating at 75% of plantcapacity:Sales (350,000 units)Cost of goods soldGross profitOperating expensesNet income$4,375,0002,600,0001,775,000840,000$ 935,000Cost of goods sold was 70% variable and 30% fixed; operating expenses were 80%variable and 20% fixed.In September, Moonbeam receives a special order for 15,000 toasters at $7.60 eachfrom Luna Company of Ciudad Juarez. Acceptance of the order would result in anadditional $3,000 of shipping costs but no increase in fixed costs.Instructionsa. Prepare an incremental analysis for the special order.Sales (350,000 units)Cost of goods soldunitGross ProfitOperating expensesNet income==$4,375,000$2,600,000 x 70% = 1,820,000 / 350000 = $5.2 variable cost per===$1,775,000$840,000 x 80% = 672,000 = $1.92 variable cost per unit$935,000RevenuesCost of Goods SoldOperating ExpensesNet Income====15,000 x 7.615,000 x 5.215,000 x 1.924,200===114,00078,00028,800 + 3000 =31,800b. Should Moonbeam accept the special order? Why or why not?Moonbeam should accept the special order. This is because the special order results in an increase innet income.E7-7 Riggs Company purchases sails and produces sailboats. It currently produces1,200 sailboats per year, operating at normal capa

Review from student

Studypool Student
" This tutor is great! "
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1831 tutors are online

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors