Cowboy Ice Cream Company (CIC) produces ice cream bars that it markets through a variety of...
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Cowboy Ice Cream Company (CIC) produces ice cream bars that it markets through a variety of grocery stores. It makes the ice cream bars in batches of 2,000 units. CIC produced 56,000 ice cream bars during the prior accounting period. The cost of producing the ice cream bars is shown below Materials cost ($26 per unit $6,000) $1,456,000 Labor cost ($23 per unit 56,000) 1,288,000 Manufacturing supplies (55 56,000) 280,000 Batch-level costs (28 batches at $7,000 per batch) 196,000 Product-level costs. 230,000 Facility-level costs 290,000 Total costs $3,740,000 Cost per unit $3,740,000+56,000 - $79.57 Required a. OnCue has offered to buy a batch of 700 Ice cream bars for $60 each. CIC's normal selling price is $95 per unit. Calculate the relevant cost per unit for the special order. Based on the preceding quantitative data, should CIC accept the special order? b. OnCue offered to buy a batch of 2,000 ice cream bars for $60 per unit, calculate the relevant cost per unit for the special order. Should CIC accept the special order? For all requirements, round "Cost per unit" to 2 decimal places.) Cowboy Ice Cream Company (CIC) produces ice cream bars that it markets through a variety of grocery stores. It makes the ice cream bars in batches of 2,000 units. CIC produced 56,000 ice cream bars during the prior accounting period. The cost of producing the ice cream bars is shown below Materials cost ($26 per unit $6,000) $1,456,000 Labor cost ($23 per unit 56,000) 1,288,000 Manufacturing supplies (55 56,000) 280,000 Batch-level costs (28 batches at $7,000 per batch) 196,000 Product-level costs. 230,000 Facility-level costs 290,000 Total costs $3,740,000 Cost per unit $3,740,000+56,000 - $79.57 Required a. OnCue has offered to buy a batch of 700 Ice cream bars for $60 each. CIC's normal selling price is $95 per unit. Calculate the relevant cost per unit for the special order. Based on the preceding quantitative data, should CIC accept the special order? b. OnCue offered to buy a batch of 2,000 ice cream bars for $60 per unit, calculate the relevant cost per unit for the special order. Should CIC accept the special order? For all requirements, round "Cost per unit" to 2 decimal places.)
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