Imperial Jewelers manufactures and sells a gold bracelet for $409.00. The companys accounting system says that the unit product cost for this bracelet is $274.00 as shown below: Direct materials $ 148 Direct labor 89 Manufacturing overhead 37 Unit product cost $ 274 The members of a wedding party have approached Imperial Jewelers about buying 14 of these gold bracelets for the discounted price of $369.00 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 $9. Imperial Jewelers would also have to buy a special tool for $452 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 much jewelry is produced in any given period. However, $10.00 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 sell jewelry to other customers. Furthermore, the company could fulfill the wedding partys 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? YES OR NO

Wexpro, Incorporated, produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $55,000 per ton, one-fourth of which is allocated to product X15. Eight thousand six hundred units of product X15 are produced from each ton of clypton. The units can either be sold at the split-off point for $14 each, or processed further at a total cost of $7,100 and then sold for $17 each.

Required:

1. What is the financial advantage (disadvantage) of further processing product X15?

2. Should product X15 be processed further or sold at the split-off point?