Question
Franklin Sports received a special order for 1,000 units of its bicycles at a selling price of $250 per bike. Franklin has enough extra capacity
Franklin Sports received a special order for 1,000 units of its bicycles at a selling price of $250 per bike. Franklin has enough extra capacity to accept the order. No additional selling costs will be incurred. Unit costs to make and sell this product are as follows: direct materials, $100; direct labor, $70; variable manufacturing overhead, $10; fixed manufacturing overhead, $15, and variable selling costs, $3. A special machine would have to be purchased for $5,000 to fulfill this order. What should be the amount of total relevant costs for this special order?
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