Taino Ventilators, Inc. makes a variety of ventilators. One of these products is a Ventilators model: Super Air-XL. This
Posted: Thu May 19, 2022 1:39 pm
Taino Ventilators, Inc. makes a variety of ventilators. One of
these products is a Ventilators model: Super Air-XL. This model
includes the ultimate in technology and is in strong demand.
Expected demand for this year is 57,000 units. Full production
capacity for SuperAir--XL is 64,000 units, but 57,000 units are
considered normal capacity. The following unit price and breakdown
is applicable in 2022: Per Unit Sales Price $685.00 Less
manufacturing costs: Materials $66.00 Direct Labor $22.00 Overhead:
Variable $23.00 Fixed $26.00 Total manufacturing costs $137.00
Gross Margin $548.00 Less selling and administrative expenses
Selling: Variable $5.00 Fixed $46.00 Administrative, Fixed $72.00
Masks Options, variable* $59.00 Total selling and administrative
expenses $182.00 Net Profit before taxes $366.00 During December,
the company received 2 special orders request from: Custco-Medical
and Laboratory-Apex. These orders are not part of the budgeted
57,000 units sales of SuperAir -XL for 2022, but there is
sufficient capacity for possibly one order to be accepted. Orders
received and their terms are:
• Order from Custco-Medical: 5,500 units at $570 per unit with
deluxe mask $59 per unit. • Order from Laboratory-Apex: 4,500 units
at $635 per unit with standard mask $45 per unit. Since these
orders were made directly to Taino Ventilators, Inc., no variable
selling costs will be incurred. 1. Analyze the profitability of
each of these two special orders. 2. Which special order should be
accepted? 3. What other aspects need to be considered in addition
to profitability?
Taino Ventilators, Inc. makes a variety of ventilators. One of these products is a Ventilators model: Super Air-XL. This model includes the ultimate in technology and is in strong demand. Expected demand for this year is 57,000 units. Full production capacity for Super Air-XL is 64,000 units, but 57,000 units are considered normal capacity. The following unit price and breakdown is applicable in 2022 Per Unit Sales Price $685.00 Less manufacturing costs: Materials $66.00 Direct Labor $22.00 Overhead: Variable $23.00 Fixed $26.00 Total manufacturing costs $137.00 Gross Margin $548.00 Less selling and administrative expenses Selling: Variable $5.00 Fixed $46.00 Administrative, Fixed $72.00 Masks Options, variable* $59.00 Total selling and administrative expenses $182.00 Net Profit before taxes $366.00 During December, the company received 2 special orders request from: Custco-Medical and Laboratory-Apex. These orders are not part of the budgeted 57,000 units sales of SuperAir - XL for 2022, but there is sufficient capacity for possibly one order to be accepted. Orders received and their terms are:
• Order from Custco-Medical: 5,500 units at $570 per unit with deluxe mask $59 per unit. • Order from Laboratory-Apex: 4,500 units at $635 per unit with standard mask $45 per unit. Since these orders were made directly to Taino Ventilators, Inc., no variable selling costs will be incurred. 1. Analyze the profitability of each of these two special orders. 2. Which special order should be accepted? 3. What other aspects need to be considered in addition to profitability?
these products is a Ventilators model: Super Air-XL. This model
includes the ultimate in technology and is in strong demand.
Expected demand for this year is 57,000 units. Full production
capacity for SuperAir--XL is 64,000 units, but 57,000 units are
considered normal capacity. The following unit price and breakdown
is applicable in 2022: Per Unit Sales Price $685.00 Less
manufacturing costs: Materials $66.00 Direct Labor $22.00 Overhead:
Variable $23.00 Fixed $26.00 Total manufacturing costs $137.00
Gross Margin $548.00 Less selling and administrative expenses
Selling: Variable $5.00 Fixed $46.00 Administrative, Fixed $72.00
Masks Options, variable* $59.00 Total selling and administrative
expenses $182.00 Net Profit before taxes $366.00 During December,
the company received 2 special orders request from: Custco-Medical
and Laboratory-Apex. These orders are not part of the budgeted
57,000 units sales of SuperAir -XL for 2022, but there is
sufficient capacity for possibly one order to be accepted. Orders
received and their terms are:
• Order from Custco-Medical: 5,500 units at $570 per unit with
deluxe mask $59 per unit. • Order from Laboratory-Apex: 4,500 units
at $635 per unit with standard mask $45 per unit. Since these
orders were made directly to Taino Ventilators, Inc., no variable
selling costs will be incurred. 1. Analyze the profitability of
each of these two special orders. 2. Which special order should be
accepted? 3. What other aspects need to be considered in addition
to profitability?
- Taino Ventilators Inc Makes A Variety Of Ventilators One Of These Products Is A Ventilators Model Super Air Xl This 1 (56.71 KiB) Viewed 38 times
- Taino Ventilators Inc Makes A Variety Of Ventilators One Of These Products Is A Ventilators Model Super Air Xl This 2 (23.27 KiB) Viewed 38 times
• Order from Custco-Medical: 5,500 units at $570 per unit with deluxe mask $59 per unit. • Order from Laboratory-Apex: 4,500 units at $635 per unit with standard mask $45 per unit. Since these orders were made directly to Taino Ventilators, Inc., no variable selling costs will be incurred. 1. Analyze the profitability of each of these two special orders. 2. Which special order should be accepted? 3. What other aspects need to be considered in addition to profitability?