Question
Biello Company manufactures and sells medals for winners of athletic and other events. Its manufacturing plant has the capacity to produce 20,000 medals each month;
Biello Company manufactures and sells medals for winners of athletic and other events. Its manufacturing plant has the capacity to produce 20,000 medals each month; current monthly production is 19,000 medals. The company normally charges $60 per medal. Cost data for the current level of production are shown below.
| Variable Costs | |||
| Direct Materials | $484,500 |
| |
| Direct Labor | $142,500 |
| |
| Selling and Administrative | $135,038 |
| |
|
Fixed Costs |
| ||
| Manufacturing | $185,275 |
| |
| Selling and Administrative | $44,888 |
| |
The company has just received a special one-time order for 700 medals at $40 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: Should the company accept this special order? Provide numerical support for your decision.
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Tracking Your Trek Looking Backward To Determine Your Forward
Authors: Erica Pauly
1st Edition
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