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Blue Spruce Inc. manufactures two electronic products, widgets and gadgets, and has a capacity of 2,600 machine hours. Prices and costs for each product are

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Blue Spruce Inc. manufactures two electronic products, widgets and gadgets, and has a capacity of 2,600 machine hours. Prices and costs for each product are as follows: Widget Gadget $266 $346 Selling price per unit Variable costs per unit Direct materials Other direct costs Variable Manufacturing overhead costs 33 51 13 28 46 60 *Variable manufacturing overhead costs are applied at a rate of $56 per machine hour. Marx Industries, a potential client, has offered $266 per unit to Blue Spruce for 266 special units. These 266 units would incur the following production costs and time; a Direct materials $9,568 Other direct costs $4,600 Machine hours 241 Assume that Blue Spruce has enough excess capacity to produce the special order. Calculate what the total contribution would be if the special order from Marx were accepted. Total contribution margin $ Assume that Blue Spruce is currently operating at full capacity. Calculate the contribution margin per unit and per machine hour. (Round machine hours to 2 decimal places, eg. 12.25 and final answers to decimal places, es, 125) Widget Gadget New Order CM per unit $ CM per machine hour Determine whether Blue Spruce should produce the units for the special order instead of widget or gadget units. Blue Spruce produce the units for the special order instead of widget or gadget units. Assume that Blue Spruce is actually operating at 95% of full capacity, Calculate what the opportunity cost would be if Marx's special order were accepted. Opportunity cost $ Assume that Blue Spruce is actually operating at 95% of full capacity, and additional machines can be rented at a cost of $36,600 to produce Marx's special order. If the special order is accepted, calculate its effect on Blue Spruce's profit $ Net profit from doing the special order

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