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Exercise 11-4 (Algo) Special Order Decision [LO11-4] Impetial Jeweles manufactures and selis a gold bracelet for $403.00. The company's accounting system says thot the unit
Exercise 11-4 (Algo) Special Order Decision [LO11-4] Impetial Jeweles manufactures and selis a gold bracelet for $403.00. The company's accounting system says thot the unit product cost for this bracelet is $263.00 as shown below. The membets of a wedding party have opproached imperial Jewelers about buying 28 of these gold bracelets for the discounted price of $363.00 each The members of the wedding party would like special filtgree applied to the bracelets that would inciease the direct materials cost per bracelet by $12. Imperial Jewelers would also have to buy a special tool for $452 to apply the fligree to the bracelets. The special tool would have no other use once the speciaf order is completed To andyze this spocial order opportunity, imperis Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by varations in how much jeweliry is produced in any given period. However, $13.00 of the overhead is variable with recnect to the number of bracelets produced. The company also believes that accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party's order using its existing manufictuing capacity. Required: 1. What is the financial advantage (disadvantage) of accepting the special ordec from the wedding party? 2. Should the company accept the special order? Complete this question by entering your answers in that tabs below
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