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Author Question: Zephram Corporation has a plant capacity of 200,000 units per month. Unit costs at capacity are: ... (Read 548 times)

dmcintosh

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on: Mar 6, 2021

Question 1

Which of the following is true of relevant information?
◦ All fixed costs are relevant.
◦ All Future revenues and expenses are relevant.
◦ Future
◦ All fixed costs are not relevant.

Question 2

Zephram Corporation has a plant capacity of 200,000 units per month. Unit costs at capacity are:

Direct materials$6.00
Direct labor5.00
Variable overhead4.00
Fixed overhead2.00
Marketing-fixed6.00
Marketing/distribution-variable4.60

Current monthly sales are 190,000 units at $30.00 each. Q, Inc., has contacted Zephram Corporation about purchasing 2,500 units at $24.00 each. Current sales would not be affected by the one-time-only special order. What is Zephram's change in operating profits if the one-time-only special order is accepted?
◦ $11,000 increase
◦ $31,500 increase
◦ $22,500 increase
◦ $49,000 increase
Horngren's Cost Accounting: A Managerial Emphasis ¦ Datar, Rajan ¦ 16th Edition
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Marked as best answer by dmcintosh on Mar 6, 2021

mochi09

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Reply #1 on: Mar 6, 2021
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dmcintosh

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Reply 2 on: Mar 6, 2021
Excellent

chereeb

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

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