Ask Question, Ask an Expert


Ask Cost Accounting Expert

problem: The Melville Company manufacture a single product called a Pong. Melville has the capacity to produce 60,000 Pongs each year. If Melville produces at capacity, per unit value to produce and sell one Pong are as follows:

Direct materials


Direct labor


Variable manufacturing overhead


Fixed manufacturing overhead


Variable selling expense


Fixed selling expense


The regular selling value for one Pong is $80. A special order has been received by Melville from Mowen firm to buy 6,000 Pongs next year. If this special order is accepted, variable selling expense will be reduced by 75 percent. However, Melville will have to buy a specialized machine to engrave Mowen name on each Pong in the special order. This machine will cost $9,000 & it will have no use after special order is filled. The total fixed manufacturing overhead & selling costs would be unaffected by this special order.

Suppose Melville anticipates selling only 50,000 units of Pong to regular customers next year. If Mowen Company offers to purchase the special order units at $65 per unit, effect of accepting the special order on Melville's operating income for next year should be a:

Select one answer.

[1] $60,000 increase
[2] $90,000 decrease
[3] $159,000 increase
[4] $36,000 increase

Cost Accounting, Accounting

  • Category:- Cost Accounting
  • Reference No.:- M922570

Have any Question? 

Related Questions in Cost Accounting

1 what factors influence the costs of supplying such public

1. What factors influence the costs of supplying such public goods as police protection and national defense? What might cause these costs to go up or down, and how would such change affect your taxes? 2. How does a pers ...

Cost accenting group report assignment-outcomes -a select

Cost Accenting Group Report Assignment- Outcomes - a) Select devise and apply different types of cost allocation and explain their different roles for supporting strategic managerial decision making. b) Design and prepar ...

Cost of capitalthe intent of this assignment is to

Cost of Capital The intent of this assignment is to demonstrate proficiency in determining the costs of capital for the firm. It is a comprehensive problem in that you first need to determine the cost of each source of c ...

Module cost of capital worksheetthe assignment in this

Module Cost of Capital Worksheet The assignment in this module builds on the idea of forecasting and valuation theory from Chapters 6 and 7 in Module Six by valuing a company through calculations using real data. This wi ...

Exercise assume that schipper company has the same data as

Exercise : Assume that Schipper Company has the same data as before, but that Schipper Company now pays a marginal tax rate of 40 percent. Required 1. What is the after-tax cost of the mortgage bonds? 2. What is the afte ...

Nbspquestions1 can marginal product be zero or negative2

Questions: 1. Can Marginal Product be Zero or negative? 2. What would be Marginal Cost if cost of producing 4 units is '50 and that of 5 units is '68? 3. Is the difference between ATC and AVC is constant? Give reason whe ...

Cool ride skis ltd case studyit is the end of 2015 and

COOL RIDE SKIS LTD CASE STUDY It is the end of 2015 and Grace Miller, senior management accountant for Cool Ride Skis Ltd has been analysing the Victorian division's 2015 results. Both she and the company's Managing Dire ...

Assignmentproblem 1 cvp analysisthe owners of cobbs gym

Assignment Problem 1: CVP analysis The owners of Cobb's Gym currently are working on their operating plan for the coming year, and they have provided you with the following average membership and cost data for the previo ...

Question 1the following data is supplied to youmonthunits

Question 1: The following data is supplied to you: MONTH UNITS PRODUCED COSTS January 1 000 R3 800 February 1 060 R4 110 March 900 R3 560 April 1 100 R4 470 May 1 160 R4 600 June 1 310 R4 995 Required Determine the total ...

Abc costing1 assume you own a business that makes two

ABC COSTING 1. Assume you own a business that makes two complementary products for which you allocated manufacturing overhead proportionally. A competitor is trying to undercut your price for one of the products. How mig ...

  • 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