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D. Taylormade Corp. manufactures golf bags with the following cost data/ bag: Direct materials 2.30 Direct labor 3.60 Variable overhead 75% of direct labor Fixed
D. Taylormade Corp. manufactures golf bags with the following cost data/ bag: Direct materials 2.30 Direct labor 3.60 Variable overhead 75% of direct labor Fixed overhead 150% of direct labor It has received a special order from an organization sponsoring a golf tournament that plans to give its golf bags as tournament giveaways. It has sufficient capacity to manufacture this special order and its regular sales will not be affected by this special order. It could save 25 cents in direct materials and 10% of direct labor for this special order. The organization has offered a special order price of 15/ bag which is lower by 7.40/ bag based on its regular selling price. If the corporation adds 60% to its full manufacturing cost to get its selling price, should it accept or reject the special order? Show detailed computations
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