1) Which of the following costs will be relevant to Cathy Donatos analysis of the special order being considered by Winners Circle, Inc.? (You may select more than one answer.)

A) Fixed marketing cost.unchecked

B) Variable costs of labor and material.unchecked

C) Fixed manufacturing costs.unchecked

D) Variable marketing cost.

2)

2-a. Compute both the new average unit cost and the incremental unit cost for the special order.

2-b. Should Winners Circle, Inc. accept the special order?

3) Identify the considerations that Donato should include in her analysis of the special order. (You may select more than one answer.)

A) The future customer potential of the buyer of the special order, generating additional revenues.unchecked

B) Acceptance of the special order could result in higher bonuses for the department's staff.unchecked

C) Possible problems with other customers who pressure the company for similar treatment.

Winner's Circle, Inc. manufactures medals for winners of athletic events and other contests. lts manufacturing plant has the capacity to produce 2,000 medals each month. Current monthly production is 1,500 medals. The company normally charges $535 per medal. Variable costs and fixed costs for the current activity level of 75 percent of capacity are as follows Production Costs Variable costs Manufacturing: S 240,000 157,500 112,500 S 510,000 Direct labor Direct material Marketing Total variable costs Fixed costs: S 206,400 63,600 S 270,000 S 780,000 340 180 520 Manufacturing Marketing Total fixed costs Total costs Variable cost per unit Fixed cost per unit Average unit cost Winner's Circle has just received a special one-time order for 500 medals at $310 per medal. For this particular order, no variable marketing costs will be incurred. Cathy Donato, a management accountant with Winner's Circle, has been assigned the task of analyzing this order and recommending whether the company should accept or reject it. After examining the costs, Donato suggested to her supervisor, Gerard LePenn, who is the controller, that they request competitive bids from vendors for the raw material as the current quote seems high. LePenn insisted that the prices are in line with other vendors and told her that she was not to discuss her observations with anyone else. Donato later discovered that LePenn is a brother-in-law of the owner of the current raw-material supply vendor