The Casings department received a special order for 4,000 car cradles at the discounted price of $25 each. While the Casings department has sufficient capacity to increase their output to accommodate the special order, the Electronics department does not have sufficient capacity to supply the additional products to Casings for this special order. To fulfill the order, Electronics has to forgo their external sales.(a) Based on the facts provided, is this special order in the best interests of Foleo Accessories? Why? (2 marks)(b) Calculate the transfer price between Electronics and Casings if it is based on variable cost plus 30%. Is it likely that the internal transfer will take place to fulfill the special order? Prove your answer with incremental analysis per unit for both internal and external sales for the Electronics department. (HINT: Compare the contribution margin between internal and external sales) (4 marks)(c) Suggest a transfer price that is acceptable to both departments. (2 marks)

Foleo Accessories has 2 manufacturing processes required to produce the car cradles, undertaken by the Electronics and Casings departments. These departments are both currently run as profit centres, so they are responsible for both their revenues and costs. The Electronics department builds the circuitry and inner workings of the cradle, which consumes $10 in variable costs per unit. The finished goods of the Electronics department are then passed through to the Casings department, who incurs an additional $6 in variable costs per unit to mould the cradle, fit the electronics and package the finished product. Once completed, the Casings department typically sells the car cradle to its end-user customers and other retailers for $30 per cradle. The Electronics department can also sell their products to an outside customer for $18 per unit. This external sale incurs an additional variable cost of $1 per unit for packaging.Question 1Not yet savedMarked out of 1.00Flag questionTipsQuestion textAssume that there is spare capacity in the Electronics department. Use the general rule to calculate the transfer price for its product.Answer text Question 1Rich text editorTransfer Price = Outlay cost per unit + Opportunity cost per unit10+0 = $10 per unit.Question 2Not yet savedMarked out of 1.00Flag questionTipsQuestion textAssume that there is no spare capacity in the Electronics department. Use the general rule to calculate the transfer price for its product.Answer text Question 2Rich text editorCM per unit= $18 - $10 - $1 = $7Transfer pricing = $10+$7 = $17Question 3Not yet savedMarked out of 8.00Flag questionTipsQuestion textThe Casings department received a special order for 4,000 car cradles at the discounted price of $25 each. While the Casings department has sufficient capacity to increase their output to accommodate the special order, the Electronics department does not have sufficient capacity to supply the additional products to Casings for this special order. To fulfill the order, Electronics has to forgo their external sales.(a) Based on the facts provided, is this special order in the best interests of Foleo Accessories? Why? (2 marks)(b) Calculate the transfer price between Electronics and Casings if it is based on variable cost plus 30%. Is it likely that the internal transfer will take place to fulfill the special order? Prove your answer with incremental analysis per unit for both internal and external sales for the Electronics department. (HINT: Compare the contribution margin between internal and external sales) (4 marks)(c) Suggest a transfer price that is acceptable to both departments. (2 marks)

manufacturing firm uses a particular component, which it orders from a supplier. The supplier has provided the following discounted pricing for the component. Number of components ordered Discount per unit1-199 $65200-599 $59600+ $56The manufacturing company uses 700 of the components annually. The annual carrying cost is $14 per unit, the ordering cost is $275. Determine the amount the firm should order. (answer should be in whole number)

LO 10.1 If a company has four lots of products for sale, purchase 1 (earliest) for $17, purchase 2 (middle) for $15, purchase 3 (middle) for $12, and purchase 4 (latest) for $14, which cost would be assumed to be sold first using LIFO costing?Choose one answer from the options below.A. $17 B. $15C. $12D. $14BackNext

Multiple Choice QuestionA company receives a special order of 10,000 units of product. The potential customer is willing to pay $0.75 per unit. Current sales are $90,000 and current costs are $75,000 for 90,000 units. If the order is accepted, costs will increase to $82,000. If the company has the capacity to accept the order without affecting current sales, the company should:Multiple choice question.reject the order, because income will decrease by $500reject the order, because the sales price of $0.75 per unit is less than current costs of $0.83 per unitaccept the order, because income will increase by $500accept the order, because sales will increase by $7,500

A company has an annual demand (D) of 5,000 units for a particular product. The ordering cost (K) is Rs.25 per order, and the holding cost (H) is Rs.1 per unit per year. Calculate the Economic Order Quantity (EOQ). 500 600 700 800