Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. flip flop inc. (ffi) has a capacity to manufacture

Flip Flop Inc. (FFI) has a capacity to manufacture up to 100,000 flip flops annually in...

60.1K

Verified Solution

Question

Accounting

Flip Flop Inc. (FFI) has a capacity to manufacture up to 100,000flip flops annually in Canada. For next year, expected productionand sales are 80,000 units with sale price of $10 per unit. Thefollowing costs are expected:

Production and sales

80,000 units

Direct materials used

120,000 $

Directlabour                           

  80,000

MOH variable

120,000

MOH fixed

280,000

Selling expenses variable

  64,000

Selling expenses fixed

  56,000

FFI received the following offers:

1.              AfricaImports (AI) would like to purchase 10,000 units for $8.70 $ saleprice per unit.

2.              ChinaImports (CI) would like to purchase 20,000 units for $6.60 saleprice per unit.

There will be no selling expenses on AI and CI orders. Therewill be no impact on regular sales in Canada.

a)              Calculatethe impact on FFI operating income if AI order is accepted.

b)              Calculatethe impact on FFI operating income if CI order is accepted.

c)              Whichoffer should FFI accept? Why?

d)              Forthe offer you recommend in c) above, mention and explain twoqualitative factors FFI should consider before making the finaldecision.

Answer & Explanation Solved by verified expert
4.0 Ratings (677 Votes)
    See Answer
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: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

A pension fund manager is considering three mutual funds. The first is a stock fund, the...

Finance
Q

Choosing Lottery Numbers: In the Super-Mega lottery there are 50 numbers (1 to 50), a player...

Basic Math
Q

For a conservative force F, all if the following are correct except A. there exists an associated...

Physics
Q

Factor Company is planning to add a new product to its line. To manufacture this product,...

Accounting
Q

21 3 900

Geometry
Q

by Jayme I think the purpose of progressivism education is to allow our students to...

Basic Math
Q

Solve exactly then gi 69x 1 7 T 2

Calculus
Q

Sweeten Company had no jobs in progress at the beginning of the year and no...

Accounting
Q

Exercise 11-30 (Algo) Impairment; property, plant, and equipment [LO11-8] General Optic Corporation operates a manufacturing...

Accounting
Q

On January 1, 2019 JP's Company issued $300,000 of 12-year, 6% bonds at par. Interest...

Accounting
Q

The appeal of using multiple departmental overhead rates is that they presumably provide a more...

Accounting
Q

ssignment Problem Four-7 (Comprehensive Tax Payable dia Hines is a translator who works for a...

Accounting