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Find the financial advantage Imperial Jewelers manufactures and sells a gold bracelet for $406.00. The company's accounting system says that the unit product cost for
Find the financial advantage
Imperial Jewelers manufactures and sells a gold bracelet for $406.00. The company's accounting system says that the unit product cost for this bracelet is $266.00 as shown below? The members of a wedding porty have approached imperial Jewelers about buying 20 of these gold bracelets for the discounted price of $366.00 each. The members of the wedding party would like special filigree applied to the bracelets that would increase the direct materials cost per bracelet by $10. Imperial Jewelers would also have to buy a special tool for $465 to apply the filigree to the bracelets. The special todi 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 varlations in how much jeweiry is produced in any given period. However, $1100 of the overhead is variable with respect to the number of bracelets produced. The company also belleves that accepting this order would have no effect on its ability to re 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 Shouid the company accept the special order Step by Step Solution
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