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HEB SUPPLY MANUFACTURES AIRSOFT GUNS USED BY RECREATIONAL

HEB SUPPLY MANUFACTURES AIRSOFT GUNS USED BY RECREATIONAL

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Author: Christine Farr
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http://theperfecthomework.com/heb-supply-manufactures-airsoft-guns-used-by-recreational-gamers-producing-a-box-of-2-500-air-soft-ammunition-is-as-follows/

HEB Supply manufactures airsoft guns used by recreational gamers.producing a box of 2,500 air soft ammunition is as follows:Direct materialsDirect labor$ 12.506.25Variable factory overhead18.75Fixed factory overhead25.00Variable selling, general, and administrative costs18.75Fixed selling, general, and administrative costsThe cost of4.00The fixed factory overhead and fixed SG&A cost is allocated based on an assumption thatthe business will produce 400,000 boxes of paintballs per year. The company hascapacity to produce 500,000 boxes without impacting either category of fixed cost.(a)The market for this ammunition has become very competitive. Management hasrequested to know the break-even price that can be charged for a box ofammunition, assuming production and sale of 400,000 boxes.(b)Management has received a special order request for 100,000 boxes of "privatelabel" airsoft ammunition. The order specifies a per box price of $75. How willprofitability be impacted if the order is accepted?Name:Date:(a)(b)Section:B-24.03B-24.04

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