1. The Comfy Company manufactures slippers and sells them at $7 a pair. Variable manufacturing cost is $3.00 a pair, and allocated fixed manufacturing cost is $1.55 a pair. It has enough idle capacity available to accept a one-time-only special order of 30,000 pairs of slippers at $4.55 a pair. Comfy will not incur any marketing costs as a result of the special order. What would the effect on operating income be if the special order could be accepted without affecting normal sales: (a) $0. (D) $46,500 increase. (c) $90,000 increass, or (d) $136.500 increase? Show your calculations. 2. The Portland Company manufactures Part No. 498 for use in its production line. The manufacturing cost per unit for 10,000 units of Part No. 498 is as follows: (Click to see the manufacturing cost per unit.) Read part 2's requirement. CODE C. $136,500 increase OD. $90,000 increase 2. The Portland Company manufactures Part No. 498 for use in its production line. The manufacturing cost per unit for 10,000 units of Part No. 498 is as follows: (Click to see the manufacturing cost per unit.) For Portland to achieve an overall savings of $20,000, the amount of relevant costs that would have to be saved by using the released facilities in the manufacture of Part No. 575 would be which of the following: (a) $40,000, (b) $90,000, (c) $c $60,000 or (0) $110,0007 Show your calculations. What other factors might Portland consider before outsourcing to Cushion? Begin by selecting the labels to calculate the relevant costs that would have to be saved and then enter in the supporting calculations Data table Cost to purchase Total relevant costs of making: (per unit) Requirement Direct materials $ 3 Variable direct manufacturing labor 22 For Portland to achieve an overall savings of $20,000, the amount of relevant Variable manufacturing overhead 16 Costs saved by not making costs that would have to be saved by using the released facilities in the 19 manufacture of Part No. 575 would be which of the following: (a) 540,000, (b) x units in the offer Fixed manufacturing overhead allocated 590,000. (c) $60,000 or (d) $110.000? Show your calculations. What other factors $ 60 Total costs saved might Portland consider before outsourcing to Cushion? Total manufacturing cost per unit Extra costs of purchasing outside The Cushion Company has offered to sell 10,000 units of Part No. 498 to Portland for $58 per unit. Portland will make the decision to buy the part from Cushion if Minimum savings required there is an overall savings of at least 520,000 for Portland. If Portland accepts Print Necessary relevant costs to be saved Done Cushion's offer, $8 per unit of the fixed overhead allocated would be eliminated. Furthermore, Portland has determined that the released facilities could be used to save relevant costs in the manufacture of Part No. 575. (
