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maxonik
1 month ago
15

You are analyzing cost data for your boss related to a special order your company is considering from a large customer in Singap

ore. The following data are applicable to the product being ordered: Normal unit sales price: $49.95 Variable unit manufacturing costs: $10.50 Variable unit selling and administrative costs: $18.25 The customer is requesting that the sales order be accepted on the following terms: The unit sales price equals the unit contribution margin plus 10% Freight will be paid by the customer Your company will pay a $5,000 "facilitating payment "to a "friend of the customer" to get the product through customs more quickly. Your boss has told you this is a very important customer. Furthermore, this order will help some employees earn a little extra holiday money with overtime.
Business
1 answer:
Katen [3.5K]1 month ago
3 0

Answer:

In addressing the relevant response, it is inferred that units are measured in thousands for the request.  

Thus, the complete commitment would be:  

Sales = 49950  

Variable Costs = 10500  

Variable Selling Expenses = 18250  

Contribution Margin = 21200  

Considering the client's insistence on maintaining the commitment at a specific level, this would not benefit the organization as it would not yield the same level of $ 21200 as the commitment, especially since an additional $ 5000 would be required for the custom discharge despite eliminating selling costs; thus the revised figures would be:  

Sales = 23320  

Variable Costs = 10500  

Variable Selling Expenses = 0  

Contribution Margin = 12820  

Part 1: Accounting concerns:  

  • This situation would create a bookkeeping challenge to report sales at a price lower than what is charged to other clients.  
  • Accepting the order would lead to an accounting deficit.  

Ethical considerations:  

  • Other clients might be dissatisfied as they would be charged a higher rate for similar services.  
  • Furthermore, employees may also feel undervalued as the overtime expenses may not compensate for the extra time spent with the family
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8 0
2 months ago
What are other ethical concerns that Stilton may be facing?
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Complete Question:

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Requirement:

What additional ethical dilemmas might Stilton encounter?

Answer with Explanation:

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Response:

Clarification:

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Answer:

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