Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. question no. 7 (20 minutes) cba inc., a manufactur

Question No. 7 (20 minutes) CBA Inc., a manufacturer, has received a special...

50.1K

Verified Solution

Question

Accounting

image

Question No. 7 (20 minutes) CBA Inc., a manufacturer, has received a special request for 1000 units of its product, widgets, at a price of $ 52.50 per unit. The normal selling price for widgets is $ 60.00per unit. CBA Inc.'s annual capacity of 25,000 units and its current sales are 22,000 units per year. To analyze this special order, Jim Blum, the sales manager, gathered the following budgeted information: $ Direct material cost per unit Direct labour per unit Variable overhead per unit Fixed manufacturing overhead per unit Variable selling and administrative per unit 2.10 1.75 0.96 1.10 10.96 The variable selling and administrative costs per unit represent commissions and would not be incurred on this special order. a) Calculate the increase or decrease in contribution margin that will occur if the order is accepted. b) Assume CBA Inc.'s current sales are 25,000 units annually. Use incremental/differential analysis to support whether CBA should accept this additional 1,000 unit special order or not. State your conclusion as to whether the special order should be accepted or not and why

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

Biology
1.2K views

explain some of the main factors that led to the start and development of the...

Finance
1.2K views

Suppose you borrow $20,000 at an annual rate of 6% and must repay it in 6...

Statistics
1.2K views

The heights of UNC sophomores are approximately normally distributed. The heights in inches of 8 randomly...

Psychology
1.2K views

Empiricism and Normative Assumptions are two sides of the same coin. Explain why they are epistemologically...

Physics
1.2K views

A thick spherical shell with inner radius 2R and outer radius 4R has uniform charge...

Geometry
1.2K views

Use the graph of f z shown below to 10 9 8 7 654 3...

Basic Math
1.2K views

Bette tells Marv that she is thinking of the simplified solution of a linear equation...

Calculus
1.2K views

Suppose sin?= 3/5, sin?= 20/29. Moreover, suppose ? is quadrant IV and ? is in...

Calculus
1.2K views

2 f x 2 x Stepi Slope of tangent line lim X 9 f x...

Accounting
1.2K views

Does the net periodic pension cost cause a company's reported earnings to increase?

Accounting
1.2K views

Smith Company's variable expenses are 60% of sales. A 1,200 increase in the company's fixed...

Finance
1.2K views

24 Which of the following equations consider as an objective function in the linear programming...