B2a) Starting with your standard bar costs from part B1, compute the estimated cost per bar for the new special order from the wellness products supplier for 200,000 1.25-oz. organic chocolate bars. The bars will have special stir-in ingredients that Kay estimates will cost about $10 per pound, and these ingredients will become about 7 percent of the finished weight of the bar. The additional labor required for stirring in these ingredients is estimated to be 10.5 hours at $12.50/hour for each batch of 10,000 bars.

B2b) Compare your estimated cost per bar for the special order with the price, which is at a 20 percent discount off the normal price for these types of bars of $1.75. Will Kay make a profit on this order?

Operation Costing System
direct material
	1.25/Org.	1.25/Non-Org.	3.0/Non-Org.	3.25/Org.
No. of Bars	10,000	5,000	200	300
Total Cost	$ 3,756	$ 1,241	$ 111	$ 313
Total Cost Per Bar	0.38	0.25	0.56	1.04
conversion cost					Total Added	Total Bars	Cost Per Bar
Pouring/Inspection					$4,148	24000	$0.17
Foiling					$1,830	26600	$0.07
Labeling					$2,416	19950	$0.12
Other Overhead Costs					$16,200	70550	$0.23
total (fixed)							$0.59
Total Cost for Different Jods	$0.97	$0.84	$1.15	$1.63
Price Per Bar	$1.50	$1.40	$2.40	$2.55
Profit Per Bar	$0.53	$0.56	$1.25	$0.92
Profit Margin	0.3547	0.3996	0.5219	0.3608
Margin Percentage (Profitability)	35.47%	39.96%	52.19%	36.08%
Job Order Costing System ( from table 4)
Price Per Bar	$1.50	$1.40	$2.40	$2.55
Total Cost Per Bar	$1.28	$1.13	$1.49	$1.88
Profit Per Bar	$0.22	$0.27	$0.91	$0.67
Profit Margin	0.1467	0.1929	0.3792	0.2627
Margin Percentage (Profitability)	14.67%	19.29%	37.92%	26.27%
Compared to Kay's estimates in table 4, which is using job order costing method to calculate, we found that operation costing method have lower total cost per bar and increase profitability by 20.85%.