Business Course Return to course ! My Subscriptions rashed jaroor Question 1 Partially correct Mark 1.00 out of 2.00 P Flag question Edit question Special Order Total cost data follow for Glendale Manufacturing Company, which has a normal capacity per period of 8,000 units of product that sell for $60 each. For the foreseeable future, regular sales volume should continue to equal normal capacity. Direct material $100,000 Direct labor 61,600 Variable manufacturing overhead 46,000 Fixed manufacturing overhead (Note 1) 38,400 Selling expense (Note 2) 35,200 Administrative expense (fixed) 15,000 $296,200 Support Business Course Return to course ! My Subscriptions rashed jaroor Notes: 1. Beyond normal capacity, fixed overhead costs increase $1,800 for each 500 units or fraction thereof until a maximum capacity of 10,000 units is reached. 2. Selling expenses consist of a 6% sales commission and shipping costs of 80 cents per unit. Glendale pays only three-fourths of the regular sales commission on sales totaling 501 to 1,000 units and only two-thirds the regular commission on sales totaling 1,000 units or more. Glendale's sales manager has received a special order for 1,200 units from a large discount chain at a price of $36 each, F.O.B. factory. The controller's office has furnished the following additional cost data related to the special order: 1. Changes in the product's design will reduce direct material costs $1.50 per unit. 2. Special processing will add 20% to the per-unit direct labor costs. 3. Variable overhead will continue at the same proportion of direct labor costs. 4. Other costs should not be affected. a. Present an analysis supporting a decision to accept or reject the special order. (Round computations to the nearest cent.) Support Business Course Return to course ! My Subscriptions rashed jaroor LOCTICOLECCI Differential Analysis Per Unit Total 43,200 $ 11 9.24 6.9 Differential revenue Differential costs Direct material Direct labor Variable manufacturing overhead Selling: Commission Shipping (F.O.B. factory terms) Total variable cost Contribution margin from special order Fixed cost increment: 2.16 x 0 $ 29.3 X 36,120 X 7,080 x Support Extra cost 5,400 1,680 X Profit on special order $ mybusinesscourse.com + 0 Banner master in a... Cart - Best... * Assign... 29.3 X Academic... Course Hero Chaturbat... Welcome ... UPPORTED Total variable cost $ Contribution margin from special order Fixed cost increment: Extra cost Profit on special order 36,120 X 7,080 x 5,400 1,680 X $ b. What is the lowest price Glendale could receive and still make a profit of $3,600 before income taxes on the special order? Round answer to two decimal places, if applicable. Support $36.92 nulu
