Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Financial Accounting Expert

National Vending Ltd., manufactures and sells 4 varieties of vending machines. This year because of competition, its board of directors has decided to stop producing one particular variety – the milk vending machine. The available stocks of raw materials normally used for this machine can also be used for the other vending machines, and the stock position presently is as follows:

155_stock position.jpg

(Presently, the capacity utilization of the plant is 70% and at that level the company incurs Rs 280,000 as factory overhead and Rs 105,000 as administrative overhead).
 
The company just received an order for 100 such milk vending machines from an important customer and  the board considered  it worthwhile to supply this order more for liaison purposes, rather than for profit purposes. They looked at the cost structure of the milk vending machine as it was during the last year. Each machine required one tin plate, two iron sheets, one brass handle and five litres of paint. The labour cost worked out Rs 3,110. Special tools required for the manufacture of these machines are still with the company and  are worth Rs 22,000. It is also estimated that if this order is undertaken, the factory overhead will go up to Rs 370,000 and the administrative overhead will go up to Rs 130,000.
 
Required:
 
The board wants to send you for negotiations with the customer and they want you to first tell them what will be the basic minimum price so that the company won’t incur any loss on this order.
 
Your answer should include the main principles of relevant cost and revenue determination?

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M95842

Have any Question? 


Related Questions in Financial Accounting

Infrastructure of homeland security hmls 4081 i choose the

Infrastructure of Homeland Security (HMLS 408) 1. I choose The Department Of Energy 2. Parts I and II are to be submitted as one submission, in the form of a continuous document. Make sure to delineate/identify part I an ...

Describe six different subjects a risk manager should

Describe six different subjects a risk manager should include in a curriculum designed for physicians to engage them in patient safety practices. Describe what might be included in each of these modules. Before you do th ...

1 at what position levels of employees is ethics an

1. At what position levels of employees is ethics an important part of decision making in a company? 2. The Foreign Corrupt Practices Act outlaws what type of business practices and how? 3. Conduct a Porter’s 5 forces an ...

Assignmenta manufacturing company is thinking of launching

Assignment A manufacturing company is thinking of launching a new product. The company expects to sell $950,000 of the new product in the first year and $1,500,000 each year thereafter. Direct costs including labor and m ...

Final project guidelinesoverviewto be successful all

Final Project Guidelines Overview To be successful, all businesses must perform periodic assessments to determine the efficiency of operations. Whether you are an owner, a manager, or a front- line employee, at some time ...

Assignmenti a comparing three depreciation methods obj

Assignment I. A Comparing three depreciation methods ObJ. 2 Waldum Company purchased packaging equipment on January 5, 2012, for $135,000. The equipment was expected to have a useful life of three years, or 18,000 operat ...

Assignment business accounting and youthe goal of this

Assignment: Business, Accounting, and You The goal of this graded project is to create the following financial statements for J & L Accounting, Inc.: Balance sheet Income statement Statement of retained earnings Post-clo ...

Assignmentjohns house painting company has the following

Assignment John's House Painting Company has the following transactions for the year 1. December 1 - Issued capital stock for $100,000 to start a house painting business. 2. December 1 - Paid one year insurance premium c ...

How strong a factor is ethnocentrism in war-torn regions of

How strong a factor is ethnocentrism in war-torn regions of the world, including Northern Ireland, the Middle East, northern India, central Africa, and the Balkans? Is the trend toward a global economy threatened by ethn ...

Financial accounting assignmentapa neededprocess cost

Financial Accounting Assignment APA NEEDED Process Cost Accounting Victory Company uses weighted-average process costing to account for its production costs. Direct labor is added evenly throughout the process. Direct ma ...

  • 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

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

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen