Exercise 13-27 Name: Enter the appropriate amounts or formulas in the gray shaded cells, or select from the drop-down list. An asterisk () will appear to the right of an incorrect answer. Units Units Price Revenue Less variable costs: Cost Direct materials Direct labor Variable overhead Less labeling machine Profit (loss) on special order Should Smooth Move accept the special order? Use the following information for Exercises 13-26 and 13-27: Smooth Move Company manufactures professional paperweights and has been approached by a new customer with an offer to purchase 15.000 units at a per-unit price of $7.00. The new customer is geographically separated from Smooth Move's other customers, and exist- ing sales will not be affected. Smooth Move normally produces 82,000 units but plans to produce and sell only 65,000 in the coming year. The normal sales price is $12 per unit. Unit cost information is as follows: Direct materials $3.10 Direct labor 2.25 Variable overhead 1.15 Fixed overhead 1.80 Total $8.30 Exercise 13-26 Special-Order Decision Refer to the information for Smooth Move Company above. If Smooth Move accepts the order, no fixed manufacturing activities will be affected because there is sufficient excess capacity. Required: 1. What are the alternatives for Smooth Move? 2. CONCEPTUAL CONNECTION Should Smooth Move accept the special order? By how much will profit increase or decrease if the order is accepted? 3. CONCEPTUAL CONNECTION Briefly explain the significance of the statement in the exer- cise that "existing sales will not be affected" (by the special sale). Exercise 13-27 Special Order Refer to the information for Smooth Move Company above. Suppose a customer wants to have its company logo affixed to each paperweight using a label. Smooth Move would have to purchase a special logo labeling machine that will cost $12,000. The machine will be able to label the 15,000 units and then it will be scrapped (with no further value). No other fixed overhead activities will be incurred. In addition, each special logo requires additional direct materials of $0.20. Required: CONCEPTUAL CONNECTION Should Smooth Move accept the special order? By how much will profit increase or decrease if the order is accepted? OB