2.3

Blossom Inc manufactures two electronic products, widgets and gadgets, and has a capacity of 2.700 machine hours. Prices and couts for each product are as follows Widget Gadget $267 $347 Selling price per unit Variable costs per unit Direct materiais Other direct costs Variable Manufacturing overhead costs 34 52 14 29 47 63 * Variable manufacturing overhead costs are applied at a rate of $57 per machine hour, Steering Industries, a potential client has offered $266 per unit to Blossom for 266 special units. These 266 units would be the following production costs and time: Direct materials 510.234 Other direct costs $4.700 Machine hours Assume that Blossom is actually operating at 95% of full capacity Calculate what the opportunity cost would be if Steering special order were accepted Opportunity costs Assume that Blossom is actually operating at 95% of full capacity, and additional machines can be rented at a cost of $34.700 produce Steering's special order. If the special order is accepted, calculate its effect on Blossom's proht Net profit from doing the special orders