2a

Sheridan Inc. manufactures two electronic products, widgets and gadgets, and has a capacity of 1,100 machine hours. Prices and costs for each product are as follows: Widget Gadget $251 $331 Selling price per unit Variable costs per unit Direct materials Other direct costs Variable Manufacturing overhead costs 31 36 11 13 31 45 Variable manufacturing overhead costs are applied at a rate of 541 per machine hour. Dynatech Industries, a potential client, has offered $251 per unit to Sheridan for 250 special units. These 250 units would incur the following production costs and time: Direct materials Other direct costs $8.525 $3,500 Machine hours 225 Assume that Sheridan has enough excess capacity to produce the special order. Calculate what the total contribution would be if the special order from Dynatech were accepted. Total contribution margin $