Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. 38.raffles company routinely bids on construction

38.Raffles Company routinely bids on construction jobs. Raffles first determines the budgeted product cost of...

60.1K

Verified Solution

Question

Accounting

38.Raffles Company routinely bids on construction jobs. Raffles first determines the budgeted product cost of the job and then applies a markup of 50%. If a bid of $15,000 is submitted for a new job, which of the following is true? a. $5,000 is pure profit. b. $5,000 includes selling and administrative expense, and profit. c. $5,000 includes fixed overhead, selling and administrative expense, and profit. d. Budgeted product cost is $15,000. e. All costs pertaining to the job total $15,000.

Pericloud Company produces a product that has a regular selling price of $500 per unit. At a typical monthly production volume of 4,000 units, the product's average unit cost of goods sold amounts to $300. Included in this average is $150,000 of fixed manufacturing costs. All selling and administrative costs are fixed and amount to $40,000 per month. Pericloud Company has just received a special order for 2,000 units at $280 per unit. The buyer will pay for transportation, and the regular selling price will not be affected if Pericloud accepts the order. Assuming Pericloud Company has excess capacity, the effect on profits of accepting the order would be a:

a.$72,000 decrease.

b.$72,000 increase.

c.$35,000 decrease.

d.$35,000 increase.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students