PLEASE ANSWER QUESTIONS 1-4. Pinto Manufacturing. has a capacity of producing 300,000 units a...
50.1K
Verified Solution
Link Copied!
Question
Accounting
PLEASE ANSWER QUESTIONS 1-4.
Pinto Manufacturing. has a capacity of producing 300,000 units a year and sells them at $28 a unit. Fixed overhead is budgeted at $1,200,000 while fixed administration costs are estimated to be $450,000. At present Pinto is selling 250,000 units. A foreign distributor has made a one-time offer to purchase 40,000 units at $20 a unit. The customer will pay all freight costs and no commissions will be paid on this order, so variable selling costs will be reduced by 40%. The sales manager has collected the following per-unit data on Pinto's operating costs: REQUIRED: 1. Determine if the order, as stated, should be accepted or rejected. How much better off will Pinto be if they follow your recommendation? 2. What's the "real cost" of this special order to Pinto? 3. What is the minimum acceptable price which could be accepted? 4. NOW jmagine that Pinto was operating at capacity, and that this order would displace other orders. How would this change your answer? Why? What would be the new minimum acceptable price
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!
