Exercise 8-6 Your answer is partially correct. Try again. Marigold Company is a leading manufacturer of sunglasses. One of Marigold's products protects the eyes from ultraviolet rays. An upscale sporting goods store has contacted Marigold about purchasing 17,800 pairs of these sunglasses. Marigold's unit manufacturing cost, based on a full capacity of 103,000 units, is as follows: 4 Direct materials $7 Direct labor Manufacturing overhead (60% fixed) 20 Total manufacturing costs $31 Marigold also incurs selling and administrative expenses of $77,660 plus $2 per pair for sales commissions. The company has plenty of excess manufacturing capacity to use in manufacturing the sunglasses. Marigold's normal price for these sunglasses is $40 per pair. The sporting goods store has offered to pay $38 per pair. Since the special order was initiated by the sporting goods store, no sales commission will be paid. What would be the effect on Marigold's income if the special order were accepted? increase y 480600 Marigold's income will by $ Ivanhoe Packaging Company is a leading manufacturer of cardboard boxes and other product packaging solutions. One of the company's major product lines is custom- printed cake boxes that are sold to some of the country's best known bakeries at a price of $0.50 per box. To maintain its high-quality image, Ivanhoe uses a thick premium coated paper for all of its cake boxes. Based on annual production of 1,000,000 boxes, Ivanhoe's cost for producing a box is as follows: $0.16 0.05 Paper Ink Direct labor Variable overhead Fixed overhead 0.05 0.07 0.10 Total cost per box $0.43 Andrea Borden, a recent graduate of the Culinary Institute of America, is opening a new bakery in her hometown. She recently contacted Brad Lail, Ivanhoe's top salesperson, about purchasing cake boxes for her new store. Brad described Ivanhoe's boxes, emphasizing the high-quality paper and the unique printing process the company uses. Andrea is looking for ways to lower her operating costs, so after hearing Brad describe Ivanhoe's boxes, she told him that all she needed was a simple, unprinted box. Andrea also told Brad that she needs 9,600 boxes and is willing to pay $0.26 per box. (a) Based on Andrea's offer of $0.26 per box for an unprinted box, should Ivanhoe accept Andrea's order? Ivanhoe currently has excess production capacity and can easily accommodate Andrea's order in the production schedule. Ivanhoe should not accept the order. (c) After visiting with Andrea, Brad received a fax from one of London's top bakeries. The bakery's normal box supplier suffered some fire damage and is unable to ship the bakery's order of 9,600 boxes this month. The bakery's owner is asking if Ivanhoe can fill a onetime rush order of 9,600 boxes printed with the bakery's logo. The bakery is willing to pay a 10% price premium to expedite the order. If Ivanhoe accepts the order, it will incur $804 in export taxes and shipping. Calcuate the Profit on special order. Profit on special order Should Ivanhoe accept the London bakery's offer