5 points 7. Refer to the information above. Assume that Roy Distributors offers
ID: 2503312 • Letter: 5
Question
7. Refer to the information above. Assume that Roy Distributors offers to purchase the additional 5,000 saws at a price of $37 per unit. If Prestige accepts this price, Prestige's monthly gross profit on sales of power saws will:
8. Refer to the information above. Using an incremental analysis approach, Prestige should consider accepting this special order only if the price per unit offered by Roy is at least:
9. Refer to the information above. Prestige decides to accept the special order for 5,000 units from Roy at a unit sales price that will add $100,000 per month to its operating income. The unit price Prestige is charging Roy is:
A) The opportunity cost involved in accepting Roy's order. B) The incremental cost of manufacturing an additional 5,000 saws per month. C) The $45 average cost per unit to manufacture a power saw. D) Where and at what price Roy intends to sell the saws.Explanation / Answer
6. Refer to the information above. Which of the following is not a relevant factor in Prestige's decision concerning whether to accept the special order from Roy?
Answer
Answer
Answer
A) The opportunity cost involved in accepting Roy's order. B) The incremental cost of manufacturing an additional 5,000 saws per month.------------ANSWER C) The $45 average cost per unit to manufacture a power saw. D) Where and at what price Roy intends to sell the saws. 7. Refer to the information above. Assume that Roy
Distributors offers to purchase the additional 5,000 saws at a price of $37 per unit. If Prestige accepts this price, Prestige's monthly gross profit on sales of power saws will:
Answer
A) Increase by $35,000.-------------ANSWER B) Increase by $185,000. C) Decrease by $40,000. D) Decrease by $240,000.Since there would be no added fixed costs, the only costs would be variable.
(5,000 units x $47 sales price) - (5,000 units x $40 variable cost) = c.Increase by $35,000.
9. Refer to the information above. Prestige decides to accept the special order for 5,000 units from Roy at a unit sales price that will add $100,000 per month to its operating income. The unit price Prestige is charging Roy is:
Answer
A) $20.80. B) $50.00. C) $62.50. D) $60.------------ANSWER5,000 X$40 = $200,000 + $100,000 = $300,000/5,000 = $60
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