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Guadalupe Olayo produces grandfather clocks. Each grandfather clock normally sells for $1,500. The following manufacturing cost information per clock is available: Direct materials are $220,
Guadalupe Olayo produces grandfather clocks. Each grandfather clock normally sells for $1,500. The following manufacturing cost information per clock is available: Direct materials are $220, labor is $550, variable overhead is $30, manufacturing is $25, and S&A is $[q] (based on planned production for the year of 1,200 clocks). Commissions are 0.1% of selling price, and fixed selling and administrative costs are $70,000. Guadalupe's tax rate is 0.25%. A European company has asked Guadalupe to accept a special order for 400 clocks. Due to some minor design changes, the material and labor costs for the special order clocks would increase by 0.2%. Since the clocks are different from the regular clocks, another production run will need to be
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