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Ellen, Lawyer
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11. Kava Inc. manufactures industrial components. One of

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11. Kava Inc. manufactures industrial components. One of its products, which is used in the construction of industrial air conditioners, is known as K65. Data concerning this product are given below:
Per Unit

Selling price

Direct materials

Direct labor

Variable manufacturing overhead

Fixed manufacturing overhead

Variable selling expense

Fixed selling and administrative expense

The above per unit data are based on annual production of 4,000 units of the component. Direct labor can be considered to be a variable cost. (Source: CMA, adapted)
The company has received a special, one-time-only order for 500 units of component K65. There would be no variable selling expense on this special order, and the total fixed manufacturing overhead and fixed selling and administrative expenses of the company wouldn't be affected by the order. Assuming that Kava has excess capacity and can fill the order without cutting back on the production of any product, what is the minimum price per unit on the special order below which the company shouldn't go?

A. $180
B. $59
C. $78
D. $38
Hello dear client,

Answer is D.$38

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Jabi, Lecturer
Category: Homework
Satisfied Customers: 1364
Experience: I have done MBA in Finance and Accounting.
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Customer: replied 5 years ago.
I am still waiting the answer on 19 and 20
Hello dear client,

I provided answer to question 16 and working on 19 and 20.

Customer: replied 5 years ago.
I still need an answer on Q19 and Q20 please
Customer: replied 5 years ago.
19. VIM Company purchased $100,000 in inventory from its suppliers on credit terms. The company's acid-test ratio would most likely

A. be impossible to determine without more information.
B. decrease.
C. be unchanged.
D. increase.

20. (Ignore income taxes in this problem.) The following data pertain to an investment:

Cost of the investment

Life of the project
5 years

Annual cost savings

Estimated salvage value

Discount rate

The net present value of the proposed investment is

A. $0.
B. $621.
C. $(3,430).
D. $3,355.

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Ellen, Lawyer
Category: Homework
Satisfied Customers: 36714
Experience: Lawyer, Accountant and Researcher
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