Exercise 6-6A (Algo) Speclal order declslon LO 6-2 Vernon Concrete Company pours concrete slabs for single-family dwellings. Lanctng Construction Company, which operates outsade Vernon's normal sales territory, asks Vermon to pour 54 slabs for Lanctng's new development of homes. Vernon hac the capactity to bulld 330 slabs and is presently working on 180 of them. Lancing is willing to pay only $2,550 per slab. Vernon estimates the cost of a typical job to Include unit-level matertals, $900, unit-evel labor, $410, and an allocated porton of facility-level ovorhead, $1.30 Required Calculate the contribution to profit from the spectal order Should Vernon accept or reject the special order to pour 54 slabs for $2,550 each? Contribution to profit Should Vernon accept or reject the special order? rnytiow/Connect.htm AssagnmonE Connoct Exercise 6-9A (Algo) UsIng the contributlon margin approach for a special order declslon LO 6-2 Solomon Company, which produces and sells a small digital clodk, bases ts prdng strategy on a 20 percent markup on total cost Baced on annual producttion costs for 10000 units of product, computations for the sales price per clock follow. nit-level costs Fixed costs Total cost (a) Markup (a 0.20) Total sales (b) $130. Sales price per unit (b +10,000) Required a Solomon has excess capacity and recelves a special order for 8,000 dlocks for $18 each Calculate the contribution margin per unt Based on this, should Solomon accept the special order? b. Prepare a contribution margin Income statement for the special order Complete this question by entering your answers in the tabs below. Required Required A Solomon has excess capacity and receives a special order for 8,000 docka for $18 each. Calculate the contribution margin per unit. Based on this, should Solomon accept the special order? Contribution margin per unit Should Solomon accept the special order? Required B Exerclse 6-1OA (Algo) Outsourcing declslon LO 6-3 Jordan Bicyce Manufactuing Comparnycurrently produces the handlebars used In manufacturing Its bicyclos, which are high-quality racing bilkes with imited sales. Jordan produces and sells only 7500 bikos each year. Due to the low volume of activity, Jordan is unable to obtain the economies of scale that larger producers achieve. For examplo, Jordan could buy the handlobars for $34 each they cost $37 each to make. The following is a detaled breakdown of current production costs UnE Cost Unit-level costs Materlals Total $16 $120,000 82,500 22,500 Labor Overhead Allocated facility-level costs 11 7 52,500 Total $37 $277,500 After seeing these figures, Jordan's president remarked that it would be foolish handlebars at $37 each when It can buy them for $34 each for the company to continue to produce the C Required Calculate the total relevant cost. Do you agree with the president's conclusion? Per Unit Total Total relevant cost Do you agree with the president's conclusion
