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5. Chase Corporation has received a request for a special order of 6,075 units of product Y45 for $13.72 each. Product Y45's unit product cost
5. Chase Corporation has received a request for a special order of 6,075 units of product Y45 for $13.72 each. Product Y45's unit product cost is $11.50, determined as follows: Direct materials.. Direct labor Variable manufacturing overhead. Fixed manufacturing overhead...... .......... Unit product cost $2.50 1.90 2.30 4.80 $11.50 This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order, and the special order would have no effect on the company's existing fixed manufacturing overhead costs. The customer would like modifications made to product Y45 that would increase the variable costs by $8.24 per unit and that would also require an investment of $19,835 in special molds that would have no other use and no salvage value. Should Chase accept the special order? If the special order is accepted, the company's overall net operating income would increase (decrease) by how much? Show your work! (2 points)
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