Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Blended Products manufactures t-shirts It has the following costs when its production level is 80,000 units t-shirts Click the icon to view the costs) Click

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
Blended Products manufactures t-shirts It has the following costs when its production level is 80,000 units t-shirts Click the icon to view the costs) Click the icon to view additional information) What will happen to Blended's operating income if it accepts this special order? Complete the following incremental analysis to determine the impact on Blended's operating income if it accepts this special order (Round all pe unit amounts to the nearest.com SXXX and will other amounts to the nearest whole dollar. Entar ao for any zero balances Use parentheses or minus sign to indicate a decrease in contribution margin and/or operating income from the price order Total Order (8,000 units) Per Unit Incremental Analysis of Special Sales Order Decision Reversoe from special order Less variable expense associated with the order: Direct materials Direct labor Vatlable manufacturing overhead Contribution margin Less Additional fixed expenses associated with the order Blended Products manufactures t-shirts. It has the following costs when its production level is 80,000 units (t-shirts): (Click the icon to view the costs.) (Click the icon to view additional information) What will happen to Blended's operating income it it accepts this special order? RE Total Order (8,000 units) Per Unit Incremental Analysis of Special Sales Order Decision Revenue from special order Less variable expense associated with the order: Direct materials Direct labor Variable manufacturing overhead Contribution margin Less: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special order increase reduce Blended accept the special sales order because it will operating income contribu should Less: A es associated with the order Increase should not ing income from the special order Blended accept the special sales order because it will operating income Data table Total costs for 80,000 units Direct materials $ 272 000 Direct labor 40.000 Nariable manufacturing overhead Fixed manufacturing overhead 60,000 110,000 Total manufacturing costs $ 482,000 More info The company's relevant range extends to 93.000 units. Blended has received a special order for 8.000 t-shirts at a special price of $46.000 for the entire order. The special order t-shirt would use a fabric that is less expensive than the standard fabric used by Blended, which would allow Blended to save $0.45 per t-shirt in direct materials when manufacturing this special order Blended has the excess capacity to manufacture this special order. Its total fixed costs will not be impacted by the special order

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Advanced

Authors: Claudia Bienias Gilbertson

9th Edition

0538447559, 9780538447553

More Books

Students also viewed these Accounting questions

Question

What is the purpose of a costbenefit analysis?

Answered: 1 week ago