Personall Company mautactures and sells 60000 widgets per year. Personali has pr

Question

Personall Company mautactures and sells 60000 widgets per year. Personali has production capscity of 80000 widgets. The cost of building and selling a widget is computed as follows (for txed costs, the per unit rate is based on the current sales and production level $36 $19 Direct materials Direct labor Variable manufacturing overhead... $5 Plxed manufacturing overhead...$ Sales commission (variable selling). $ Fxed selling costs.$ Pers rail rom any sels the w t'or,5 %ofthe to a cost naor se ing costs. An was er wants i place ao etme nerfor 1400m ea at See apply to the special order. However, Personali will need to pay a one-time fee of $10500 for a special license to do business in the customers country os t No onnsen won What is the regular selling price of one widget? by how much wl. Pe sonars Compan income change it decides to accept the special order? Give me the ano nt with a negative sign ncome waad decrease input ustthe amount income would increase Input O if income would not change, (Round any per unit amounts in internediary computations and final answers to the nearest penny. when needed)

Explanation / Answer

Req 1: REGULAR SELLING PRICE: Cost of Widget: Material 36 Labour 19 Variable manufacturing OH 5 Fixed manufacturing OH 7 Sselling Commission 1 Fixed selling OH 3 Total cost 71 Add: Markup 35.5 Selling cost 106.5 Regular Selling price is $ 106.50 Incremental income from Order: Incremental revenue from Order (14000 units @ 66) 924000 Less: Incremental cost Material (14000 units @ 36) 504000 Labour (14000 units @ 19) 266000 OH (14000 units @5) 70000 Special licence cost 10500 Incremental income from Order: 73500 Incremental income from order: $ 73,500

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