Question
Albertine Co. manufactures and sells trophies for winners of athletic and other events. Its manufacturing plant has the capacity to produce 16,000 trophies each month;
Albertine Co. manufactures and sells trophies for winners of athletic and other events. Its manufacturing plant has the capacity to produce 16,000 trophies each month; current monthly production is 12,800 trophies. The company normally charges $110 per trophy. Cost data for the current level of production are shown below:
| Variable costs: |
|
| Direct materials | $614,400 |
| Direct labor | $256,000 |
| Selling and administrative | $35,840 |
| Fixed costs: |
|
| Manufacturing | $294,400 |
| Selling and administrative | $94,720 |
The company has just received a special one-time order for 1,200 trophies at $58 each. For this particular order, no variable selling and administrative costs would be incurred. This order would also have no effect on fixed costs. Required: (please show all work as to why you come to your conclusion) Should the company accept this special order? Why?
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Excise Tax Ozone Depleting Chemicals IRS Audit Techniques Guide
Authors: Internal Revenue Service
1st Edition
1304114279, 978-1304114273
