Montgomery Company has a normal plant capacity of 37,500 units per month. Because of an extra large quantity of inventory on hand, it expects to produce only 30,000 units in May. The present selling price is $13.50 per unit. Montgomery has an opportunity to sell 7,500 additional units at $9.00 per unit to an exporter who plans to market the product under its own brand name in a foreign market. The additional business is, therefore, not expected to affect the regular selling price or quantity of sales of Montgomery Company. The cost to make the product is:Direct Materials$ 3.00Direct Labor$ 1.25Variable Overhead$ 4.00Fixed Overhead$ 3.00Total Cost$11.25Total fixed costs won’t change if this order is accepted but special shipping charges on the order will cost a total of $2,000. Determine what Montgomery’s profit or loss will be from selling the 7,500 additional units to the exporter. Clearly state both the amount and whether it is a profit or a loss.
RECOMMENDED!!Montgomery Company has a normal plant capacity
How it works
- Paste your instructions in the instructions box. You can also attach an instructions file
- Select the writer category, deadline, education level and review the instructions
- Make a payment for the order to be assignment to a writer
- Download the paper after the writer uploads it
Will the writer plagiarize my essay?
You will get a plagiarism-free paper and you can get an originality report upon request.
Is this service safe?
All the personal information is confidential and we have 100% safe payment methods. We also guarantee good grades
Recent Comments