Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. circuit masters incorporated (cmi) is presently op

Circuit Masters Incorporated (CMI) is presently operating at 80% of capacity and manufacturing 125,000 units...

50.1K

Verified Solution

Question

Accounting

Circuit Masters Incorporated (CMI) is presently operating at 80% of capacity and manufacturing 125,000 units of a patented electronic component. The cost structure of the component is as follows:

image

An Italian firm has offered to purchase 20,500 of the components at a price of $26.50 per unit, FOB CMI's plant. The normal selling price is $33.50 per component. This special order will not affect any of CMI's "normal" business. Management calculated that the cost per component is $24.90, so it is reluctant to accept this special order. Required:

  1. Calculate the fixed overhead per unit?
  2. Is the cost calculation appropriate?
  3. Should the offer from the Italian firm be accepted?
imageimage Raw materials Direct labor Variable overhead Fixed overhead $6.50 per unit 6.50 per unit 8.50 per unit $425,000 per year Complete this question by entering your answers in the tabs below. Calculate the fixed overhead per unit? Note: Round your answer to 2 decimal places. b. Is the cost calculation appropriate? c. Should the offer from the Italian firm be accepted

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

Algebra
1.2K views

A polynomial has a constant term of 6 and a leading coefficient of 4. Which...

Basic Math
1.2K views

Profit Parabolas: The baseball card shop is trying to sell limited baseball cards for $30, yet...

Biology
1.2K views

1 The male reproductive organ of a flower is present in a Calyx b Corolla...

Basic Math
1.2K views

Macmillan Learning Suppose that Paulie and Vinny each can produce ice cream or t shirts...

Calculus
1.2K views

The table provides various values including select minimums and maximums of a particular cosine function...

Algebra
1.2K views

Find the time it takes for $8,900 to double when invested at an annual interest...

Accounting
1.2K views

When a company identifies an attractive industry that offers a higher-than-normal...

Accounting
1.2K views

On 10 May an investor sells a six-month put option on 1,000 shares of a...

Accounting
1.2K views

Distinguish between a "hard asset" and a "soft asset." Cite several examples

Accounting
1.2K views

Beacon Company is considering automating its production facility. The initial investment in automation would be...

Finance
1.2K views

Which of these financial ratios signal the trend of higher profitability? ...

Accounting
1.2K views

Given the following two pro forma statements, create a Pro Forma Cash Flow Statement ta...