Question
Imperial Jewelers manufactures and sells a gold bracelet for $407.00. The companys accounting system says that the unit product cost for this bracelet is $270.00
Imperial Jewelers manufactures and sells a gold bracelet for $407.00. The companys accounting system says that the unit product cost for this bracelet is $270.00 as shown below:
Direct materials | $ 144 |
---|---|
Direct labor | 88 |
Manufacturing overhead | 38 |
Unit product cost | $ 270 |
The members of a wedding party have approached Imperial Jewelers about buying 21 of these gold bracelets for the discounted price of $367.00 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 $459 to apply the filigree to the bracelets. The special tool would have no other use once the special order is completed.
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