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larisa86
1 month ago
9

Landor Appliance Corporation makes and sells electric fans. Each fan regularly sells for $42. The following cost data per fan is

based on a full capacity of 150,000 fans produced each period. Direct materials $ 8 Direct labor $ 9 Manufacturing overhead (70% variable and 30% unavoidable fixed) $ 10 A special order has been received by Landor for a sale of 25,000 fans to an overseas customer. The only selling costs that would be incurred on this order would be $4 per fan for shipping. Landor is now selling 120,000 fans through regular channels each period. Assume that direct labor is an avoidable cost in this decision. What should Landor use as a minimum selling price per fan in negotiating a price for this special order
Business
1 answer:
arsen [3.4K]1 month ago
3 0

Response:

Minimum selling price= $28

Reasoning:

Based on the information provided:

Direct materials $8

Direct labor $9

Variable manufacturing costs= $7

Landor has received a special order for 25,000 fans destined for an overseas buyer.

The only incurred selling cost for this order will be $4 per fan for shipping.

Given that this is a special request and there is available capacity, fixed costs will not be considered in this analysis.

The minimum price needed equals the total variable cost per unit. It is not a sustainable price long-term.

Variable cost per unit= 8 + 9 + 7 + 4= $28

[[TAG_55]]Minimum selling price= $28[[TAG_56]]
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Dic. 31, 2019        Gastos por Intereses                           7,000

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1 month ago
Lake Corporation is considering the elimination of one of its segments. The segment incurs the following fixed costs. If the seg
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Response:

The avoidable costs linked to the segment amount to $754,000

Detailed explanation:

The costs tied to the segment under consideration for elimination are as follows:

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Answer:

The opportunity cost for Janet to create a pizza amounts to 0.67 gallons of root beer, while for Megan it is 0.71 gallons of root beer.

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8 0
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