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Data table Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing costs More info Total costs for 75,000 units EA 255,000
Data table Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing costs More info Total costs for 75,000 units EA 255,000 26,250 60,000 160,000 $ 501,250 - The company's relevant range extends to 87,500 units. Print has received a special order for 7,500 t-shirts at a special price of $45,000 for the entire order. The special order t-shirt would use a fabric that is less expensive than the standard fabric used by Print, which would allow Print to save $0.25 per t-shirt in direct materials when manufacturing this special order. Print has the excess capacity to manufacture this special order. Its total fixed costs will not be impacted by the special order. Print Products manufactures t-shirts. It has the following costs when its production level is 75,000 units (t-shirts): (Click the icon to view the costs.) (Click the icon to view additional information.) What will happen to Print's operating income if it accepts this special order? Complete the following incremental analysis to determine the impact on Print's operating income if it accepts this special order. (Round all per unit amounts to the nearest cent, $X.XX, and all other amounts to the nearest whole dollar. Enter a "0" for any zero balances. Use parentheses or a minus sign to indicate a decrease in contribution margin and/or operating income from the special order.) Total Order Incremental Analysis of Special Sales Order Decision Per Unit (7,500 units) Revenue from special order Less variable expense associated with the order: 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
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