2 What is the most 3. If Blasingham buys the part, by how much will income increase or decrease? Problem 8-54 Special-Order Decision Rianne Company produces a light fixture with the following unit cost: Problem 8-55 Segmented Income Statements, Product-Line Analysis Alard Company produces blenders and coffee makers. During the past year, the company pro- duced and sold 65.000 blenders and 75,000 coffee makers. Fixed costs for Alard totaled $340,000, if the coffee makers are not produced. Revenue and variable cost information follows: of which $184.000 can be avoided if the blenders are not produced and $142,500 can be avoided 1 MON Should Blasingham Company make or buy Part Q108? Blasingham would be willing to pay an outside supplier? ace the part. um PROBLEMS O $2 Direct materials Direct labor Variable overhead Fixed overhead Unit cost 3 2 The also The production capacity is 300,000 units per year. Because of a depressed housing market, the company expects to produce only 180,000 fixtures for the coming year. has fixed selling costs totaling $500,000 per year and variable selling costs of $1 per unit sold. company The fixtures normally sell for $12 each. Szombs At the beginning of the year, a customer from a geographic region outside the area normally served by the company offered to buy 100,000 fixtures for $7 each. The customer also offered to pay all transportation costs. Since there would be no sales commissions involved, this order would not have any variable selling costs. Required: nolistoblenog video 1. CONCEPTUAL CONNECTION Based on a quantitative (numerical) analysis, should the company accept the order? 2. CONCEPTUAL CONNECTION What qualitative factors might impact the decision? Assume that no other orders are expected beyond the regular business and the special order. Coffee Makers Blenders $29