Special Order Total cost data follow for Greenf future, regular sales volume sho

ID: 2430238 • Letter: S

Question

Special Order Total cost data follow for Greenf future, regular sales volume should continue to equal normal capacity eld Manufacturing Company, which has a normal capacity per period of 20,000 units of product that sell for $54 each. For the foreseeable Direct material Direct labor Variable manufacturing overhead Fixed manufacturing overhead (Note 1 Selling expense (Note 2) Administrative expense (ixed) $268.800 202,000 154,000 18,800 129,600 50.000 $923.200 Notes 1. Beyond normal capacity, fixed overhead costs increase $4500 for each 1,000 units or fraction thereof undi a maximum capacity of 24,000 units is reached. 2. Selling expenses consist of a 10% sales commission and shipping costs of $1 per unit Greenfield pays only onehe f of the regular sales commission rates on sales amounting to $3,000 or more. Greenfield's sales manager has received a special order for 2,500 units from a large discouns chein at a price of S44 each, FO.B. factory. The controlier's office has furnished the following additional cost data related to the special order: 1. Changes in the product's design will reduce direct material costs by $4 per unit 2. Special processing will add 10% to the per-unit direct labor costs. 3. Variable overhead will continue et the same proportion of direct labor costs 4. Other costs should not be affected. en analysis supporting a decision to accept or reject the special oroer.(Round computations to the nearest cent) Differential Analysis Per UnitTotal 110 000 Dfferental revenue Diferental cost Direct maceria Dinect labor Seling

Explanation / Answer

ANSWER;-

variable Cost per unit (A)

31.22

Sales Qty (B)

2,500

Total Variable Cost (C= A*B)

78,050

Additional Fixed Cost (D)

13,500

Desired Profit (E

5,000

Total Sale Value required (F= C+D+E)

96,550

Sales price per unit (F/B)

38.62