Moreland, Inc. has been producing and selling 50,000 units per year. They have excess capacity. The following budget was prepared for next year: Required:
a. Compute the contribution approach cost of manufacturing one unit.
b. Compute the absorption approach cost of manufacturing one unit.
c. Compute the effect on net income if a special order for 2,000 units at a price of $44 is accepted.

Question

Moreland, Inc. has been producing and selling 50,000 units per year. They have excess capacity. The following budget was prepared for next year:  Required:
a. Compute the contribution approach cost of manufacturing one unit.
b. Compute the absorption approach cost of manufacturing one unit.
c. Compute the effect on net income if a special order for 2,000 units at a price of $44 is accepted.

Quizplus · Accepted Answer

The Answer of Moreland, Inc. has been producing and selling 50,000 units per year. They have excess capacity. The following budget was prepared for next year:  Required:
a. Compute the contribution approach cost of manufacturing one unit.
b. Compute the absorption approach cost of manufacturing one unit.
c. Compute the effect on net income if a special order for 2,000 units at a price of $44 is accepted.