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Do Table and explain should mountain goat cycles do the special order? Yes or No? Problem #3-Special Order (1Points) Mountain Goat Cycles has just received

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Do Table and explain should mountain goat cycles do the special order? Yes or No?

Problem #3-Special Order (1Points) Mountain Goat Cycles has just received a request from the Seattle Police Department to produce 100 specially modified mountain bikes at a price of $535 each. Mountain Goat Cycles can easily modify its City Cruiser model to fit the specifications of the Seattle Police. The normal selling price of the City Cruiser bike is $698, and its unit product cost is $564 as shown below: Direct materials Direct labor Manufacturing overhead Unit product cost 372 90 102 $564 The variable portion of the above manufacturing overhead is $12 per unit. The order would have no effect on the company's total fixed manufacturing overhead costs. The modifications requested by the Seattle Police Department consist of welded brackets to hold radios and other gear. The modifications would require $36 in incremental variable costs. In addition, the company would have to pay a graphics design studio $2,400 to design and cut stencils that would be used to spray painting the SPD's logo. This order has no effect on the company's other sales. The production manager says she can handle the special order without disrupting any of the company's regular scheduled production. What effect would accepting this order have on the company's net operating income? Only the incremental costs and benefits are relevant Per UnitTotal 100 Bikes Incremental revenue Less incremental costs Variable costs Direct materials Direst abor Variable manufacturing overhead Special modifications Total variable costs Fixed costs Purchase of stencils Total incremental cost Incremental net operating income Should Mountain Goat Cycles do the special order? Yes or No

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