Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Cost Accounting Expert

problem: Relevant costs, special sales order-idle versus full capacity Hull Motors, Inc. [HMI], create small gasoline-powered motors for use in lawn mowers. The firm has been growing steadily over the past five (5) years and is operating at full capacity. Hull Motors has recently completed the addition of new plant & machine at a cost of $ 7,800.000. There by raising its manufacturing capacity to 100,000 motors yearly. The addition [0 plant and machine will be depreciated on a straight-line basis over 10 years.]

Sales of motors were 60,000 units prior to completion of the additional capacity. Cost records indicated that manufacturing costs had totaled dollar 60 per motor, of which $48 per motor was considered to be variable manufacturing costs. Hull Motors has used the volume of activity at full capacity as the basis for applying manufacturing overhead. The normal selling price is $80 per motor, & Hull Motors pays a 5 percent commission on the sale of its motors.

LawnPro has offered to buy 35,000 motors at a value of $60 per unit to test the viability of distributing lawn mower replacement motors through its site. Hull Motors would be expected to produce motors, store them in its ware home & ship individual motors to LawnPro consumers. As orders are placed directly through the LawnPro site, they would be forwarded instantly to Hull Motors. There will be no commissions paid on this sales order, & freight charges will be paid by the consumer purchasing a motor.

Required:

Identify all relevant costs that Hull Motors should consider in estimating special sales order from LawnPro. Why is your answer different man in requirement b?

Cost Accounting, Accounting

  • Category:- Cost Accounting
  • Reference No.:- M922995

Have any Question? 


Related Questions in Cost Accounting

Case questions rio grande medical center cost allocation

CASE QUESTIONS RIO GRANDE MEDICAL CENTER Cost Allocation Concepts 1. Is it "fair" for the Dialysis Center to suffer in profitability, and hence for the department head to possibly lose his bonus, just because the Outpati ...

Cost accounting- little debbie brownieshere is a copy of

Cost Accounting- Little Debbie Brownies Here is a copy of the assignment. My snack of choice is the Little Debbie Fudge Brownies Comprehensive Product Costing Select your favorite drink or snack item manufactured by a pu ...

Polarisreading the case and answer the all question polaris

Polaris Reading the case and answer the all question: Polaris: Suggested assignment questions Why does the Polaris outsource the manufacture of most components but in-source final assembly? Which manufacturing location o ...

Final project milestone three guidelinesoverview

Final Project Milestone Three Guidelines Overview: Classifying a company's costs allows for an in-depth analysis of the impact that changes in output have on revenues, costs, and net income or net loss. A cost-volume-pro ...

Question 1 high-low methodtucson tractor inc has

Question 1 High-low method Tucson Tractor Inc. has accumulated the following data over a six month period   Indirect Labor Hours Indirect Labor Costs January......................... 400 $ 6,000 February................. ...

Accounting assignment1 punch products inc is considering

Accounting Assignment 1. Punch Products, Inc. is considering purchasing a new production machine and has assembled the following information from two vendors of the machine that it is considering buying:   A Products B P ...

Case questionsmarriott corporation the cost of capital

Case Questions Marriott Corporation: The Cost of Capital (Abridged) 1. What is the weighted average cost of capital for Marriott Corporation? a. What risk-free rate and risk premium did you use to calculate the cost of e ...

Problem 1 master budgetomega inc has developed the

Problem 1: Master Budget Omega, Inc. has developed the following sales forecast for the first six months of the coming year Month Sales (in units) January 30,000 February 50,000 March 70,000 April 80,000 May 60,000 June ...

Module 3 - slpstrategic choicessimulationin module 3 you

Module 3 - SLP Strategic Choices SIMULATION In Module 3, you will use CVP analysis to inform the pricing of your 3 products. SCENARIO CONTINUATION: You've now completed SLP2, and it the date is (once again) January 1, 20 ...

Requirementsdo not use any direct quotes andor cut and

Requirements: Do not use any direct quotes and/or cut and pasted information (i.e. your discussion is to be 100% your thoughts, ideals and insights). A minimum 350 words are required (this is the minimum and totally feel ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro