Ask Question, Ask an Expert


Ask Accounting Basics Expert

Q1) Generators, Inc. manufactured emergency backup generators for use in large commercial buildings. Costs of manufacturing and marketing generators at company's normal volume of 3,000 units per month aregiven

Costs per Unit for Generators

Unit Manufacturing costs:
Variable Materials $1,000  
Variable Labor 1,500  
Variable Overhead 500  
Fixed Overhead 1,200  
Total Manufacturing Cost   $4,200
Unit Marketing Costs:
Variable 500  
Fixed 1,400  
Total Marketing Cost   1,900
Total Unit Cost:   $6,100

Following problems refer only to data given above. Unless otherwise stated, suppose there is no connection between conditions describeed in each of problems, each is to be treated independently. Unless otherwise stated, regular selling price of $7,400 per unit must be assumed.

On March 1, a contract offer is made to Redi-Watt by federal government to supply 500 units to Veterans Administration hospitals for delivery by March 31. As of unusually large number of rush orders from their regular customers, Redi-Watt plans to make 4,000 units in March, that will use all available capacity. If government order is accepted, 500 units normally sold to regular customers would be lost to competitor. Contract given by government would reimburse government's share of March manufacturing costs (fixed and variable) plus pay  fixed fee (profit) of $500,000. There would be no variable marketing costs incurred on government's units. What impact would accepting government contract have on March income?

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M918805

Have any Question? 

Related Questions in Accounting Basics

Practice questionsexplain the importance of the assumptions

Practice questions: Explain the importance of the assumptions used by accountants. and describe any four.

1 the rule that requires financial statements to reflect

1. The rule that requires financial statements to reflect the assumption that the business will continue operating instead of being closed or sold, unless evidence shows that it will not continue, is the: Going-concern a ...

Assignment 1- q1 abc co has an account payable of 7700 due

ASSIGNMENT 1- Q1. ABC, Co. has an account payable of $7,700 due XYZ, Inc. , one of its suppliers.  The amount was due to be paid on October 15, 2013.  ABC, Co. only had enough cash on hand then to pay $1,700 of the amoun ...

Francis moved in with her mother beatrice when beatrices

Francis moved in with her mother, Beatrice, when Beatrice's health started to fail. Francis cared for her mother as a devoted child and never expected anything in return. When Beatrice needed to move to a nursing home, s ...

Example of manual accounting - the bad old daysthe benjamin

Example of Manual Accounting - The bad old days The Benjamin Company completed these transactions during January of the current year: January 1, Began business by selling stock for $750,000.00.   January 1, Rented office ...

Describe the differences between a profit and loss account

Describe the differences between a profit and loss account and a cash flow statement.

Case study - the complete accounting cyclerequirement 1

CASE STUDY - THE COMPLETE ACCOUNTING CYCLE REQUIREMENT 1: During its first month of operation, the View Corporation, a construction company which specializes in home remodeling, completed the following transactions: 1-Ja ...

Please read the following instructions carefully- this

Please read the following instructions carefully - This assessment is to be completed according to the instructions given by your assessor. - This assessment can be taken home. - If you are not sure about any aspect of t ...

Problem - journalizing transactions the chart of account

Problem - Journalizing Transactions The chart of account for Jerome Gelacio Pest Control is as follows: Assets Income 110 Cash 410 Landscaping Revenues Expenses 120 Accounts Receivable 510 Salaries Expense 130 Prepaid In ...

Accounting principles assignment-q1 smith catering service

Accounting Principles Assignment- Q1. Smith Catering Service completed the following transactions during its first month of operations for July 2016: a. Smith Catering Service commenced operations by receiving $12000 cas ...

  • 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