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:

Irrelevant cost analysis. ~ was not considered, is it likely that a right special order analysis would have been made? describe your reasoning.

Cost Accounting, Accounting

  • Category:- Cost Accounting
  • Reference No.:- M922989

Have any Question? 


Related Questions in Cost Accounting

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................. ...

Questionyou are just from attending a conference on

QUESTION You are just from attending a conference on Activity Based Costing (ABC) and you now wish to put your knowledge to practice by applying the principles of ABC to the four products currently made and sold by your ...

For your assignment you will apply the fundamental concepts

For your Assignment, you will apply the fundamental concepts of accounting and finance that you are studying to complete several problems indicative to real-world business scenarios and challenges. For this Assignment, t ...

Cost behaviordetermining cost behavior please respond to

Cost Behavior Determining Cost Behavior: Please respond to one of the following: Option 1 Choose a company that interests you. It could be your current employer, a past employer, or even a future employer. Compare and co ...

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 ...

Instructionsnbspbull all questions carry equal marksbull

Instructions:   • All Questions carry equal marks. • All Questions are compulsory • All answers to be explained in not more than 1000 words for question 1 and 2 and for question 3in not more than 500 words for each subse ...

Accounting1 lisa inc estimates that its employees will

Accounting 1. Lisa Inc. estimates that its employees will utilize 200,000 direct labor hours during the coming year. Total overhead costs are estimated to be $6,700,000 and machine hours are estimated to be 100,000. Actu ...

Assignment- show the step by step solutions to the

Assignment- Show the step by step solutions to the following questions: I. A firm is able to sell 10,000 units at $ 12 per piece. The company fixed cost is $30,000. Variable cost is $6 per unit. 1. What is the contributi ...

Company expansion - internationallocate the financial

Company Expansion - International Locate the financial information for a company that has only domestic manufacturing operations. Assume management desires to expand into the global market with its current products. The ...

Assignmentwhile a form of abc was being used by general

Assignment While a form of ABC was being used by General Electric back in the sixties, widespread use of ABC didn't began in the United States until the late eighties. The early focus of ABC was on developing more reliab ...

  • 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