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

From the e-activity highlight the main elements that

From the e-Activity, highlight the main elements that primary disclosure accounting policies encompass, and provide at least two (2) examples of the most commonly required disclosures. Give your opinion on the way in whi ...

Without knowing anything about the personal ethics of the

Without knowing anything about the personal ethics of the owners, which company would you better trust to keep its word in a business deal? a. Harry’s Hardware has been in business for 50 years. Harry’s grandchildren, no ...

Xyz corporation which applies manufacturing overhead on the

XYZ Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its year 2016 operations: Estimated manufacturing overhead $239,500 Estimated machine-hours 4,500 A ...

Use the following information for taco swell inc assume the

Use the following information for Taco Swell, Inc, (assume the tax rate is 30 percent);   2010 2011 Sales $ 18,573 $ 17,136 Depreciation 1,801 1,876 4,679 4,847 Cost of goods sold Other expenses 1,016 894 Interest 865 99 ...

The intangible assets section of sappelt company at

The intangible assets section of Sappelt Company at December 31, 2015, is presented below. The patent was acquired in January 2015 and has a useful life of 10 years. The franchise was acquired in January 2012 and also ha ...

Outline a fraud prevention plan for a retail organization

Outline a fraud prevention plan for a retail organization to reduce the likelihood of error and fraud. In your plan, identify two (2) types of potential errors that could occur and two (2) types of fraud that could occur ...

The pcaob revoked the registration of goldstein and morris

The PCAOB revoked the registration of Goldstein and Morris CPA's, P.C. and barred the managing partner, Edward Morris, from beig associated with a registered firm in the future. The two remaining partners, Alan Goldberge ...

1 in which of the following situations should the named

1. In which of the following situations should the named company not record any depreciation expense on the asset described? a. Commuter Airline is required by law to maintain its aircraft in “as good as new” condition. ...

On january 1 2010 lurline corporation issued ten-year 8

On January 1, 2010 Lurline Corporation issued ten-year, 8 percent bonds with a face value of $500,000. The semiannual interest dates are June 30 and December 31. The bonds were issued for $437,740 to yield an effective a ...

Benedictrsquos retirement planningbenedict is 37 years old

Benedict’s Retirement Planning Benedict is 37 years old and would like to establish a retirement plan. Develop a spreadsheet model that could be used to assist Benedict with retirement planning. Your model should include ...

  • 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

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate