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11-32 Special Order Award Plus Co. manufactures medals for winners of athletic events and other contests. Its manufacturing plant has the capacity to produce 10.000

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11-32 Special Order Award Plus Co. manufactures medals for winners of athletic events and other contests. Its manufacturing plant has the capacity to produce 10.000 medals each month: CHETCO monthly production is 7.500 medals. The company normally charges $225 per medal. Variable costs and fixed costs for the current activity level of 75% follow: Current Product Costs Variable costs Manufacturing Labor Material Marketing Total variable costs Fixed costs Manufacturing Marketing Total fixed costs Total costs $ 375,000 300,000 187.500 $ 862,500 $ 275,000 225,000 $ 500.000 $1,362,500 Award Plus has just received a special one-time order for 2.500 medals at $115 per medal. For this particular order, no variable marketing costs will be incurred. Cathy Senna, management accountant with Award Plus, has been assigned the task of analyzing this onder and recommending whether the company should accept or reject it. After examining the cents, Senna suggested to her supervisor, Gerard Le Penn, who is the controller that they request competitive bids from vendors for the raw materials because the current quote seems high. LePenn insisted that the prices are in line with those of other vendors and told her that she was not to discuss her observations with anyone else. Senna later discovered that LePenn is a brother-in-law of the owner of the current row materials supply vendor. Required 1. Calculate both the old the prior to the special order) average cost per unit and the revised average cost per unit including the effect of the special sales order Round both answers to 2 decimal places are either of these two figures relevant for evaluating whether to accept of reject the special eder! Explain 2. What is the short-term effect operating profit to the nearest whole drif Awards Concepts the special sales ordertenda terest womber) Wh the breaking price for the special sales onded to decimal place 4 Dis alleast three other tions that Cathy Senna should hodeis of the special Se order Sebald the king of the in the Styles 32. Special Order Award Plus Co. manufactures medals for winners of athletic events and other contests. Its manufacturing plant has the capacity to produce 10,000 medals each month; current monthly production is 7,500 medals. The company normally charges $225 per medal. Variable costs and fixed costs for the current activity level of 75% follow: [LO 11-1|LO 11-2]Problems Current Product Costs Variable costs Manufacturing Labor $ 375,000 Material 300,000 Marketing 187,500 Total variable costs $ 862,500 Fixed costs Manufacturing $ 275,000 Marketing 225,000 Total fixed costs $ 500,000 I Total costs $1,362,500 Award Plus has just received a special one-time order for 2,500 medals at $115 per medal. For this particular order, no variable marketing costs will be incurred. Cathy Senna, a management accountant with Award Plus, has been assigned the task of analyzing this order and recommending whether the company should accept or reject it. After examining the costs, Senna suggested to her supervisor, Gerard Lepend, who is the controller, that they request competitive bids from vendors for the raw materials because the current quote seems high. beleon insisted that the prices are in line with those of other vendors and told her that she was not to discuss her observations with anyone else. Senna later discovered that Lepenn is a brother-in-law of the owner of the current raw materials supply vendor. Required: 1. Calculate both the old (ie., prior to the special order) average cost per unit and the revised Award Plus has just received a special one-time order for 2,500 medals at $115 per medal. For this particular order, no variable marketing costs will be incurred. Cathy Senna, a management accountant with Award Plus, has been assigned the task of analyzing this order and recommending whether the company should accept or reject it. After examining the costs, Senna suggested to her supervisor, Gerard LePenn, who is the controller, that they request competitive bids from vendors for the raw materials because the current quote seems high. Le Penn Insisted that the prices are in line with those a other vendors and told her that she was not to discuss her observations with anyone else. Senna later discovered that belienn is a brother-in-law of the owner of the current raw materials supply vendor. Required: 1. Calculate both the old (i.e., prior to the special order) average cost per unit and the revised average cost per unit, including the effect of the special sales order. (Round both answers to 2 decimal places.) Are either of these two figures relevant for evaluating whether to accept or reject the special order? Explain. 2. What is the short-term effect on operating profit (to the nearest whole dollar) if Award Plus Co. accepts the special sales order?a(Round answer to nearest whole number.) 3. What is the breakeven selling price per unit for the special sales order, rounded to 2 decimal places? 4. Discuss at least three other considerations that Cathy Senna should include in her analysis of the special sales order. 5. Explain how Cathy Senna should try to resolve the ethical conflict arising out of the controller's insistence that the company avoid competitive bidding

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