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

Assignmentconsider the listing at 4815 catoctin san diego

Assignment Consider the listing at 4815 Catoctin San Diego, CA 92115 Price $475,000 Bob Betty Homebuyers want to make an offer on this property at the list price. Bob earns $48,000 per year and Betty earns $54,000 per ye ...

Assignment capstone projectpart 1 adjusting entries amp

Assignment: Capstone Project Part 1 Adjusting entries & Statements Year-end Adjustment Data for Roxy and Harley Corp is as follows: 1. $300,000 in sales on account had not been recorded but were shipped FOB Shipping Poin ...

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 ...

1 accrual income versus cash flow for a period thomas book

1. Accrual income versus cash flow for a period Thomas Book Sales, Inc., supplies textbooks to college and university bookstores. The books are shipped with a proviso that they must be paid for within 30 days but can be ...

Supertronics inc would like to know how the firmrsquos

Supertronics Inc. would like to know how the firm’s profitability is altered by product mix. Currently, product mix is determined by giving priority to the model with the highest per unit contribution margin. Details on ...

Assignmentaug 1 purchased merchandise from arotek company

Assignment Aug. 1 Purchased merchandise from Arotek Company for $9,000 under credit terms of 1/10, n/30, FOB destination, invoice dated August 1. 4 At Arotek's request, Sheng paid $360 cash for freight charges on the Aug ...

Research the major risks for businesses that indulge in

Research the major risks for businesses that indulge in commercial applications of social networking. Also, review the readings on page 311 of your textbook about how organizations can respond to social networking proble ...

Briefly describe a health care provider with which you are

Briefly describe a health care provider with which you are familiar and how that organization should position its offerings. Provide specific examples to support your response. Referring to the same health care provider, ...

Assignment exxon versus chevronaccording to the textbook

Assignment: Exxon versus Chevron According to the textbook, the income statement measures the success of a company's operations for a given period. The income statement is important to investors and creditors, because it ...

Paper preparation topic abortion- please read instructions

Paper Preparation Topic: Abortion- Please read instructions in red. To prepare for your Paper (due in Week Five), complete the following assignment and submit it to your instructor for feedback. Your paper 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

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