For this case, you will use selling price and cost data to determine if a special order from a customer should be accepted. Donut House wants to examine if it should accept a special order by a customer to purchase a large order of donuts; however, the customer wants the donuts to contain the company's logo, which will require an additional cost. 

Daily average unit selling prices and current unit costs to produce are provided. Unit costs vary depending on toppings and labor to produce even though all doughnuts are sold for the same unit price. Donuts with special toppings sell in approximately the same daily sales mix, and the special order will be sold in the same sales mix. As such, the company has decided to use average costs for the most recent month. Fixed costs are allocated to units based on direct labor costs. Demand for regular sales will not be affected if the special order is accepted. The average number of units sold each day does not differ significantly. 

 

Using Data Analytics to Analyze Data
DA5.1 Data analytics can be used to determine costs to be used in a special order analysis.
Problem
Donut House wants to examine if it should accept a special order by a customer to purchase a large order of donuts, however the customer wants the donuts to contain the company's logo which will require an additional cost. Daily average unit selling prices and current units costs to produce are provided. Unit costs vary depending on toppings and labor to produce even though all doughnuts are sold for the same unit price. Donuts with special toppings sell in approximately the same daily sales mix, and the special order will be sold in the same sales mix.  As such, the company has decided to use average costs for the most recent month. Fixed costs are allocated to units based on direct labor costs. Demand of regular sales will not be affected if the special order is accepted. The average number of units sold each day does not differ significantly.
	Special order information:
		Number of donuts in the order			550
		Customer's desired unit price			$0.85
		Expected unit logo cost			$0.31
										Student Work Area
	Date	Unit SP	Average Unit VC	Average Unit CM	Average Allocated FC	Unit Profit Margin
	6/1	0.950	0.470	0.480	0.105	0.375			a.	Monthly average unit amounts
	6/2	0.950	0.472	0.478	0.106	0.372				Average unit selling price
	6/3	0.950	0.468	0.482	0.104	0.378
	6/4	0.950	0.469	0.481	0.107	0.374				Average unit variable cost
	6/5	0.950	0.467	0.483	0.103	0.380
	6/6	0.950	0.473	0.477	0.108	0.369				Average unit allocated fixed cost
	6/7	0.950	0.474	0.476	0.107	0.369
	6/8	0.950	0.472	0.478	0.106	0.372				Average unit contribution margin
	6/9	0.950	0.468	0.482	0.104	0.378
	6/10	0.950	0.469	0.481	0.107	0.374
	6/11	0.950	0.467	0.483	0.103	0.380			b.	Special order analysis
	6/12	0.950	0.474	0.476	0.104	0.372						Per Unit	Total
	6/13	0.950	0.472	0.478	0.107	0.371				Selling price per special order
	6/14	0.950	0.468	0.482	0.108	0.374				Less relevant costs:
	6/15	0.950	0.468	0.482	0.103	0.379
	6/16	0.950	0.468	0.482	0.100	0.382
	6/17	0.950	0.469	0.481	0.103	0.378
	6/18	0.950	0.467	0.483	0.101	0.382
	6/19	0.950	0.473	0.477	0.104	0.373
	6/20	0.950	0.474	0.476	0.103	0.373
	6/21	0.950	0.469	0.481	0.108	0.373
	6/22	0.950	0.467	0.483	0.107	0.376			c.	Response to part c
	6/23	0.950	0.469	0.481	0.103	0.378
	6/24	0.950	0.467	0.483	0.108	0.375
	6/25	0.950	0.464	0.486	0.107	0.379
	6/26	0.950	0.465	0.485	0.102	0.383
	6/27	0.950	0.474	0.476	0.105	0.371
	6/28	0.950	0.476	0.474	0.106	0.368
	6/29	0.950	0.485	0.465	0.108	0.357
	6/30	0.950	0.466	0.484	0.102	0.382
Instructions:
There are three parts to this problem. Use Excel to perform the following:
a.	Determine the monthly average unit selling price, unit variable cost, unit allocated fixed, and average unit contribution margin.
b.	Prepare a special order analysis using the average amounts as calculated in part a.
c.	Should Donut House accept the special order based on your analysis. Explain why. Are there any qualitative considerations that Donut House should make prior to accepting the order?