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2. Blended Products manufactures t-shirts. It has the following costs when its praduction level is 80,000 units (t-shirts): Click the icon to view the costs.)
2. Blended Products manufactures t-shirts. It has the following costs when its praduction level is 80,000 units (t-shirts): Click the icon to view the costs.) (Click the icon to view additional information.) What will happen to Blended's operating income if it accepts this special order? Complete the following incremental analysis to determine the impact on Blended's operating income if it accepts this special order. (Round all per unit amounts to the nearest cent, $X.XX, and all other amounts to the nearest whole dollar. Enter a "O" for any zero balances. Use parentheses or a minus sign to indicate a decrease in contribution margin andlor operating income from the special order.) Total Order Per Uni 8,000 units) Incremental Analysis of Special Sales Order Decision Revenue from special order Less variable expense associated with the order: Direct materials Direct labor Variable manufacturing overhead Contribution margin Less: Additional fixed expenses associated with the order Increase (decrease) in aperating income from the special order Blended (1) accept the special sales order because it will (2) operating income 1: Data Table Total costs for 80,000 units Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead 272,000 40,000 76,000 90,000 478,000 Total manufacturing costs 2: More Info More Info 1 The company's relevant range extends to 93,000 units. Blended has received a special order for 8,000 t-shirts at a special price of $38,000 for the entire order. The special order t-shirt would use a fabric that is less expensive than the standard fabric used by Blended, which would allow Blended to save $0.35 per t-shirt in direct materials when manufacturing this special order. Blended has the excess capacity to manufacture this special order. Its total fixed costs will not be impacted by the special order. Print Done
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