Purchase Solution

Relevant Cost - CompTronics

Not what you're looking for?

Ask Custom Question

CompTronics, a manufacturer of computer peripherals, has excess capacity. The company's Utah plant has the following per-unit cost structure for item no. 89:

Variable manufacturing $40
Fixed manufacturing $15
Variable selling $8
Fixed selling $11
Traceable fixed administrative $4
Allocated administrative $2

The traceable fixed administrative cost was incurred at the Utah plant; in contrast, the allocated administrative cost represents a "fair share' of CompTronics' corporate overhead. Utah has been presented with a special order of 5,000 units of item no. 89 on which no selling cost will be incurred. The proper relevant cost in deciding whether to accept this special order would be:

A. $40
B. $59
C. $61
D. $80
E. some other amount

Purchase this Solution
Solution Summary

The expert examines the relevant costs for CompTronics.

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
Recent Feedback
  • "Your explanation to the answers were very helpful."
  • "What does 1 and 0 means in the repair column?"
  • "Went through all of the formulas, excellent work! This really helped me!"
  • "try others as well please"
  • "Thank you, this helped a lot. I was not sure how to plug in those numbers to a formula. This was a great help. Now I have to figure out how to explain cost of capital is used in net present value analysis, and how cost of capital is used in net present value analysis. This stuff gets confusing."
Purchase this Solution
Free BrainMass Quizzes
Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Basics of corporate finance

These questions will test you on your knowledge of finance.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

MS Word 2010-Tricky Features

These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.

Motivation

This tests some key elements of major motivation theories.

View More Free Quizzes
Related BrainMass Solutions

  • Cost Volume Profit Analysis: CompTronics

    401723 Cost Volume Profit Analysis: CompTronics Phoenix-based CompTronics manufactures audio speakers for desktop computers.

  • Cost Volume Profit Analysis - CompTronics

    319597 Cost Volume Profit Analysis - CompTronics Phoenix-based CompTronics manufactures audio speakers for desktop computers.

  • Relevant Range and Cost Behavior Analysis

    493651 Relevant Range and Cost Behavior Analysis What is the Relevant Range? "The relevant range is indispensable in cost behavior analysis." Is this true? Why or why not?

  • Relevant cost: job costing and process costing.

    484422 Relevant cost: job costing and process costing. What is the definition of relevant cost and how would it apply to both job costing and process costing.

  • Relevant Information for Decision Making: General Motors

    Minimum acceptable selling price will be more than relevant cost for this special order: Relevant cost per unit of special order: =Variable cost+ Additional Fixed cost per unit = 10000+500 + (1000000/100000) =$10510 per unit (We will not consider

  • Variable Costs and Relevant Costs

    This cost is relevant cost since the loss is directly related to the completion of order and opportunity cost is greater than book cost. 4. Future costs If future costs are affected by a decision then its a relevant cost. Example.

  • Relevant cost of material

    What is relevant cost of material in deciding how much to bid on special order? Relevant cost is the cash flow incurred in accepting the special order. The relevant cost is 8.17/lb the cost incurred in buying the material.

  • Relevant costs

    The $108K cost is a sunk cost and is not relevant.

  • Relevant cost of materials

    This is the opportunity cost of using I59 in GEE and would be the relevant cost. Total relevant cost is R39 - 3X2,900X4.35 = $37,845 I59 - 8X2,900X6.85 = $158,920 The solution explains how to determine the relevant cost of materials.

View More Related Solutions