Imperial Jewelers manufactures and sells a gold bracelet for $400.00. The company's accounting system says that the unit product cost for this bracelet is $263.00 as shown below: Direct materials $144 Direct labor 88 Manufacturing overhead 31 Unit product cost $263 The members of a wedding party have approached Imperial Jewelers about buying 21 of these gold bracelets for the discounted price of $360.00 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 $12. Imperial Jewelers would also have to buy a special tool for $468 to apply the filigree to the bracelets. 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 muchjewelry 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 selljewelry 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 l Required 2 > Outdoor Luggage, Inc., makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below. Ski Gal-F Fishing Guard Guard Guard Selling price per unit 3 276 $ 350 $ 185 Variable cost per unit $ 155 $ 210 $ 65 Plastic injection molding machine-proce551ng 7 minutes 9 minutes 12 minutes t1rne requ1red to produce one un1t Pounds of plastic pellets per unit 11 pounds 15 pounds 13 pounds Required: 1. If we assume that the total time available on the plastic injection molding machine is the constraint in the production process, how much contribution margin per minute of the constrained resource is earned by each product? 2. Which product offers the most profitable use of the plastic injection molding machine? 3. If we assume that a severe shortage of plastic pellets has required the company to cut back its production so much that its new constraint has become the total available pounds of plastic pellets, how much contribution margin per pound of the constrained resource is earned by each product? 4. Which product offers the most profitable use of the plastic pellets? 5. Which product has the largest contribution margin per unit? Complete this question by entering your answers in the tabs below. Requiredl Required2 Required3 Required4 Required5 If we assume that the total time available on the plastic injection molding machine is the constraint in the production process, how much contribution margin per minute of the constrained resource is earned by each product? (Round your final answers to 2 decimal places.) Contribution margin per minute of the constrained resource per minute per minute per minute Required 2 > Outdoor Luggage, Inc., makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below. Ski Golf Fishing Guard Guard Guard Selling price per unit $ 270 $ 350 $ 185 Variable cost per unit $ 155 $ 210 $ 65 Plastlc 1nject10n mold1ng machineprocessmg 7 minutes 9 minutes 12 minutes tlme requlred to produce one unlt Pounds of plastic pellets per unit 11 pounds 15 pounds 13 pounds Required: 1. If we assume that the total time available on the plastic injection molding machine is the constraint in the production process, how much contribution margin per minute of the constrained resource is earned by each product? 2. Which product offers the most profitable use of the plastic injection molding machine? 3. If we assume that a severe shortage of plastic pellets has required the company to cut back its production so much that its new constraint has become the total available pounds of plastic pellets, how much contribution margin per pound ofthe constrained resource is earned by each product? 4. Which product offers the most profitable use of the plastic pellets? 5. Which product has the largest contribution margin per unit? Complete this question by entering your answers in the tabs below. Required4 ' RequiredS If we assume that a severe shortage of plastic pellets has required the company to cut back its production so much that its new constraint has become the total available pounds of plastic pellets, how much contribution margin per pound of the constrained resource is earned by each product? (Round your final answers to 2 decimal places.) ' Required 1 Required 2 Required 3 Contribution margin per pound of the constrained resource per pound per pound per pound Portsmouth Company makes upholstered furniture. Its only variable cost is direct materials The demand for the company's products far exceeds its manufacturing capacity. The bottleneck (or constraint) in the production process is upholstery labor-hours. Information concerning three of Portsmouth's products appears below: Recliner Sofa Love Seat Selling price per unit $ 1,272 $ 1,756 $ 1,586 Variable cost per unit $ 756 $ 1,156 $ 1,166 Upholstery laborhours per unit 9 hours 12 hours 6 hours Required: 1. Portsmouth is considering paying its upholstery laborers hourly compensation. in addition to their usual salaries, to work overtime. Assuming that this extra time would be used to produce sofas, up to how much of an overtime rate per hour should the company be willing to pay to keep the upholstery shop open after normal working hours? 2. A small nearby upholstering company has offered to upholster furniture for Portsmouth at a price of $48 per hour. The management of Portsmouth is confident that this upholstering company's work is high quality and their craftsmen can work as quickly as Portsmouth's own craftsmen on the simpler upholsteringjobs such as the Love Seat. How much additional contribution margin per hour can Portsmouth earn if it hires the nearby upholstering company to make Love Seats? 3. Should Portsmouth hire the nearby upholstering company? Complete this question by entering your answers in the tabs below. Required 1 Requiredz H Required3 ' Portsmouth is considering paying its upholstery laborers hourly compensation, in addition to their usual salaries, to work overtime. Assuming that this extra time would be used to produce sofas, up to how much of an overtime rate per hour should the company be willing to pay to keep the upholstery shop open after normal working hours? Portsmouth Company makes upholstered furniture. Its only variable cost is direct materials. The demand for the company's products far exceeds its manufacturing capacity. The bottleneck (or constraint) in the production process is upholstery laborhours. Information concerning three of Portsmouth's products appears below: Recliner So-Fa Love Seat Selling price per unit $ 1,272 $ 1,756 $ 1,586 Variable cost per unit $ 756 $ 1,156 $ 1,166 Upholstery laborhours per unit 9 hours 12 hours 6 hours Required: 1. Portsmouth is considering paying its upholstery laborers hourly compensation, in addition to their usual salaries, to work overtime. Assuming that this extra time would be used to produce sofas, up to how much of an overtime rate per hour should the company be willing to pay to keep the upholstery shop open after normal working hours? 2. A small nearby upholstering company has offered to upholster furniture for Portsmouth at a price of $48 per hour. The management of Portsmouth is confident that this upholstering company's work is high quality and their craftsmen can work as quickly as Portsmouth's own craftsmen on the simpler upholsteringjobs such as the Love Seat. How much additional contribution margin per hour can Portsmouth earn if it hires the nearby upholstering company to make Love Seats? 3. Should Portsmouth hire the nearby upholstering company? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 l A small nearby upholstering company has offered to upholster furniture for Portsmouth at a price of $48 per hour. The management of Portsmouth is condent that this upholstering company's work is high quality and their craftsmen can work as quickly as Portsmouth's own craftsmen on the simpler upholstering jobs such as the Love Seat. How much additional contribution margin per hour can Portsmouth earn if it hires the nearby upholstering company to make Love Seats? Show IessA .l ( Required1 Required3 >
