50.1K

Verified Solution

Link Copied!

Goshford Company produces a single product and has capacity to produce 105,000 units per month Costs to produce its current sales of 84.000 units follow. The regular selling price of the product is $136 per unit. Monagement is approached by a new customer who wants to purchase 21,000 units of the product for $8100 per unit. If the order is accepted, there will be no additional fored manufacturing overhead and no additional fixed selling and administrative expenses. The customer is not in the comparty's regular selling territory, so there will be a $6 80 per unit shipping expense in addition to the regular variable selling and administrative expenses Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses Totals Per Unit $12.50 15.00 14.00 17.50 15.00 16.00 390.00 Costs at 14,000 units $1,050,000 1,260,000 1,176,000 1,470,000 1,260,000 1.344.000 $7,500,000 Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $8100 per unit. Determine whether management should accept or reject the new business Complete this question by entering your answers in the tabs below. Net Income Accept or Reject Calculate the combined total net income if the company accepts the offer to sell additional units at the reduced price of $81.00 per unit. Normal Volume Additional Volume Combined Total 5 0 Costs and expenses 0 0 0 0 0 0 0 0 0 Total costs and expenses Net income (los) $ 0 $ 0 $ 0 Net Inc Accept or Reject>

Answer & Explanation Solved by verified expert

See Answer