Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Comfort Products manufactures t-shirts It has the following costs when its production level is 90.000 units (-shirts Click the icon to view the costs) Click
Comfort Products manufactures t-shirts It has the following costs when its production level is 90.000 units (-shirts Click the icon to view the costs) Click the icon to view addnonal information) What will happen to Comfort's operating income if it accepts this special order? Data table: Complete the following incremental analysis to determine the impact on Comfort's operating income if it accepts this special order. dotar Enter a " for any zero balances Use parentheses or a minus sign to indicate a decrease in contribution margin and/or oper Incremental Analysis of Special Sales Order Decision Per Unit Total Order (9,000 units) Revenue from special order Less variable expense associated with the order Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead: Total manufacturing costs 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 Comfort accept the special sales order because it will operating income. Total costs for 90.000 units 252,000 22.500 94.500 160,000 $29,000 Print Done More info The company's relevant range extends to 104,000 units. Comfort has received a special order for 9,000 1-shirts at a special price of $56,250 for the entire order. The special order t-shirt would use a fabric that is less expensive than the standard fabric used by Comfort, which would allow Comfort to save $0.75 per t-shirt in direct materials when manufacturing this special order. Comfort has the excess capacity to manufacture this special onder 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
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started