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2 36:12 Riel a variety of tool boxes. The firm is currently at 80% of its full of 5,850 machine- hours per month. Each unit
2 36:12 Riel a variety of tool boxes. The firm is currently at 80% of its full of 5,850 machine- hours per month. Each unit requires 30 minutes of machine time. Its sales manager has been for special orders to make use of the excess . JCL Ltd, a customer, has offered to buy 10,000 tool boxes at $11.50 per box, provided that the entire quantity is in two months. The current per-box cost data are as follows: $ 3.50 5.00 3.00 $11.50 Direct labour ( hour at $10.00/hour) Total overhead Total unit product cost Both fixed and overhead are allocated using direct as a base. Variable overhead is $2.50 per direct labour- hour. the order, Riel would have to operate at 4,680 direct in each of the next two . The regular price of the tool boxes is $14.50. A sales of 50 cents per unit is paid to sales on all regular sales. No selling or expenses are anticipated on account of accepting this special order and no commissions will be paid on this special order. The manager is concerned about the labour time that 10,000 boxes would require. She cannot schedule overtime Riel has a policy against itJCL will not accept fewer than 10,000 tool boxes. , in order to fill the special order, it would be necessary for Riel Company to divert some of its regular sales to the special order
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