ABC Company budgeted widget production for next year. Fixed factory overhead is allocated using ABC. The following estimates were provided: 10,000 Production 15,000 Capacity $80,000 Direct Materials $600,000 Direct Labour $20.00 Per Hour Direct Labour $3.00 Hours per Unit Direct Labour $50,000 Variable Manufacturing Overhead $20,000 Fixed Factory Overhead Costs Cost per Unit $8.00 Direct Materials $60.00 Direct Labour $5.00 Variable Manufacturing Overhead $2.00 Fixed Factory Overhead Costs $75.00 Total Instructions Answer each of the following independent questions: 27 A. A 3,000 unit order is received from a new customer in a country in which they have never done business. $73.50 is the offered price from the new customer. Should ABC accept the offer? How much more or less will operating income be if they accept the offer? B. $72.50 is the offered price from another company to manufacture the same quality widgets Should ABC let someone else manufacture the widgets and focus only on distribution? How much more or less will their costs be if they accept the offer?

ABC Company budgeted widget production for next year. Fixed factory overhead is allocated using ABC. The following estimates were provided Instructions Answer each of the following independent questions A. A 3.000 unit order is received from a new customer in a country in which they have never done business 573.50 is the otfered price from the new customer, Should ABC accept the offer? How much more or less wil operating income be if they accept the offer? B $7250 is the oflered price from another company to manufacture the same quality widgets. Should ABC lat someonu else manufacture the widgets and focus only on distribution? How much more or less will their costs be if they accept the offer