11/7/2020

Special orders Bracelets Decision : To accept or reject this offer

Exercise 12-4 Special price is off $169.95
Special tool $250 No other use after order completion
Special filigree $2
Selling price norma $190
Other costs total / $149
DM $84
DL $45
M/O/H $20 $4 variable

ANSWER Bracelets 20
Per Unit Total
Incremental Rvenue 169.95 3,399

Less: Costs

Direct material 84
Direct Labour 45
M/O/H 4
Special filigree 2
Total variable costs 135 2700

Special tool 250

Total costs -2,950

Incremental profit 449

Exercise 12-7 CARS Cost

Selling price beforeSelling
any modification
price after any modification
Corolla 1,000,000 1,050,000 1,230,000
Civic 1,200,000 1,230,000 1,360,000
Khyber 500,000 550,000 600,000

Requirement: Which car must you sell without any modification and after modification?

CAR
Corolla Civic Khyber
After modification 1,230,000 1,360,000 600,000
Before modificatio 1,050,000 1,230,000 550,000
Differential 180,000 130,000 50,000
Cost of modificati 80,000 110,000 25,000
profit/Loss 100,000 20,000 25,000
 CBM
To go
Avoidable Careem 200
Avoidable Uber 210
Avoidable Car fuel 150
Unavoidabe / IrrelCar registratio/lic 1,000 1,150

Requirement: If the bracelet is sold for $150 only, should it be accepted?

There was only one unavoidable cost of $16 of M/O/H

Cost of modification
80,000
110,000
25,000

modification?