Exercises Imperial Jewelers manufactures and sells a gold bracelet for $402.00 The company's accounting system says that the unit product cost for this bracelet is $262.00 as shown below. $142 Direct materials Direct Tabor Manufacturing overhead Unit product cost 12 $262 The members of a wedding party have approached Imperial Jewelers about buying 24 of these gold bracelets for the discounted price of $362.00 each. The members of the wedding party would like special filigree applied to the bracelets that would require Imperial Jewelers to buy a special tool for $469 and that would increase the direct materiais cost per bracelet by $12. The special tool would have no other use once the special order is completed To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $13.00 of the overhead is variable with respect 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 manufacturing capacity Required: 1. What is the financial advantage (disadvantage) of accepting the special order from the wedding party? 2. Should the company accept the special order? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) of accepting the special order from the wedding party? Financial advantage Required 2 > Thalassines kataskeves, SA, of Greece makes marine equipment. The company has been experiencing losses on its bilge pump product line for several years. The most recent quarterly contribution format income statement for the bilge pump product line follows: Thalassines kataskeves, S.A Income Statement-Bilge Pump For the Quarter Ended March 31 Sales $430,000 Variable expenses! Variable manufacturing expenses $ 136,000 Sales commissions 54,000 Shipping 24,000 Total variable expenses 214,000 Contribution margin 216,000 Fixed expenses Advertising (for the bilge pump product line) 27,000 Depreciation of equipment (no resale value) 111,000 General factory overhead 37,800 Salary of product line manager 128,000 Insurance on inventories 10,000 Purchasing department 59,000+ Total fixed expenses 372,000 Net operating loss 5 (156,000) "Common costs allocated on the basis of machine-hours. Common costs allocated on the basis of sales dollars. Discontinuing the bilge pump product line would not affect sales of other product lines and would have no effect on the company's total general factory overhead or total Purchasing Department expenses. Required: What is the financial advantage (disadvantage) of discontinuing the bilge pump product line
