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1. The Fresh Company manufactures slippers and sells them at $12 a pair. Variable manufacturing cost is $5.50 a pair, and allocated fixed manufacturing cost
1. The Fresh Company manufactures slippers and sells them at $12 a pair. Variable manufacturing cost is $5.50 a pair, and allocated fixed manufacturing cost is $2.75 a pair, It has enough idle capacity available to accept a one-time-only special order of 30,000 pairs of slippers at $8.25 a pair. Fresh 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 a0cepted without affecting normal sales: (a) \$0, (b) S82,500 increase, (c) \$165,000 increase, or (d) \$247,500 increase? Show your calculations. 2. The Manchester Company manufactures Part No. 498 for use in its production line. The manufacturing cost per unit for 25,000 units of Part No. 498 is as follows: (Click to see the manufacturing cost per unit.) Read part 2 's requirement. 1. The Fresh Company manufactures slippers and sells them at $12 a pair. Variable manufacturing cost is $5.50 a pair, and allocated fixed manufacturing cost is $2.75 a pair. It has enough idle capecity available to accept a one-time-only special order of 30,000 pars of slippers at $8.25 a pair. Fresh will not incur any markating costs as a result of the special order. What would the effect on operating income be if the special order could be accepied without alfecting normal sales: (a) $0, (b) $82,500 increase, (c) $165,000 increase, or (d) $247,500 increase? Show your calculations. Begin by selecting the labels to calculate the effect on operating income and then enter in the supporting calculations. Requirement For Manchester to achieve an overall savings of $50,000, the amount of relevant cosis that would have to be saved by using the released tecilities in the manufacture of Part No. 575 would be which of the following: (a) $125,000, (b) $150,000, (c) $75,000 or (d) $225,000 ? Show your calculations. What other factors might Menchester consider before outsourcing to Plate
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