Elton's Electronics Is a Wholesale Distributer for TVs and Other

question 42

Essay

Elton's Electronics is a wholesale distributer for TVs and other electronics and appliances.The selling price of TV Model 83G7 is $799.The standard cost for Model 83G7 includes $300 direct material, $30 direct labor and $200 manufacturing overhead (75% variable, 25% fixed).Elton has received a special order for 200 Model 83G7s at a price of $450 each.The only additional cost of accepting the special order is a sales commission of $9 per unit.The special order is to a retail store that will not be in competition with any other Elton customers.Ignoring qualitative factors, should Elton accept the special order?

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Definitions:

Share of Income

This refers to an individual's or entity's portion of income earned by a business or investment, typically expressed as a percentage of total profits.

Capital Totaling

The sum of an entity's financial resources, including equity, debt, and other financial instruments, used to fund its operations and investments.

Distribution

The process of delivering products or services from the producer to the intended users.

Bonus

Additional compensation given to employees as a reward for their performance, often beyond their regular earnings.