Jones Products manufactures and sells to wholesalers approximately 200,000 packages per year of underwater markers...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Jones Products manufactures and sells to wholesalers approximately 200,000 packages per year of underwater markers at $3.82 per package. Annual costs for the production and sale of this quantity are shown in the table Direct materials Direct labor Overhead Selling expenses Administrative expenses Total costs and expenses $256,000 64,000 192,000 80,000 53,000 $645,000 A new wholesaler has offered to buy 33,000 packages for $3.40 each. These markers would be marketed under the wholesaler's name and would not affect Jones Products' sales through its normal channels. A study of the costs of this additional business reveals the following Direct materials costs are 100% variable Per unit direct labor costs for the additional units would be 50% higher than normal because their production would require overtime pay at 1 times the usual labor rate 35% of the normal annual overhead costs are fixed at any production level from 150,000 to 300,000 units. The remaining 65% of the annual overhead cost is variable with volume Accepting the new business would involve no additional selling expenses Accepting the new business would increase administrative expenses by a $3,000 fixed amount
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!
