Walton Concrete Company pours concrete slabs for single-family dwellings. Lancing Construction Company, which operates outside...
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Walton Concrete Company pours concrete slabs for single-family dwellings. Lancing Construction Company, which operates outside Walton's normal sales territory, asks Walton to pour 43 slabs for Lancing's new development of homes. Walton has the capacity to build 320 slabs and is presently working on 230 of them. Lancing is willing to pay only $2,630 per slab. Walton estimates the cost of a typical job to include unit-level materials, $980; unit-level labor, $430; and an allocated portion of facility-level overhead, \$1,300. Required Calculate the contribution to profit from the special order. Should Walton accept or reject the special order to pour 43 slabs for $2,630 each? Rooney Company makes and sells lawn mowers for which it currently makes the engines. It has an opportunity to purchase the engines from a reliable manufacturer. The annual costs of making the engines are shown here. The equipment has a book value of $92,000 but its market value is zero. Required a. Determine the maximum price per unit that Rooney would be willing to pay for the engines. b. Determine the maximum price per unit that Rooney would be willing to pay for the engines, if production increased to 18,750 units. (For all requirements, Round your answers to 2 decimal places.)
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Walton Concrete Company pours concrete slabs for single-family dwellings. Lancing Construction Company, which operates outside Walton's normal sales territory, asks Walton to pour 43 slabs for Lancing's new development of homes. Walton has the capacity to build 320 slabs and is presently working on 230 of them. Lancing is willing to pay only $2,630 per slab. Walton estimates the cost of a typical job to include unit-level materials, $980; unit-level labor, $430; and an allocated portion of facility-level overhead, \$1,300. Required Calculate the contribution to profit from the special order. Should Walton accept or reject the special order to pour 43 slabs for $2,630 each? Rooney Company makes and sells lawn mowers for which it currently makes the engines. It has an opportunity to purchase the engines from a reliable manufacturer. The annual costs of making the engines are shown here. The equipment has a book value of $92,000 but its market value is zero. Required a. Determine the maximum price per unit that Rooney would be willing to pay for the engines. b. Determine the maximum price per unit that Rooney would be willing to pay for the engines, if production increased to 18,750 units. (For all requirements, Round your answers to 2 decimal places.) 