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Imperial Jewolers manufactures and selis a gold bracelet for $404.00. The company's accounting system says that the unit product cost for this bracelet is $264.00
Imperial Jewolers manufactures and selis a gold bracelet for $404.00. The company's accounting system says that the unit product cost for this bracelet is $264.00 as shown below: The members of a wedding party have approached Imperial Jewelers about buying 22 of these gold bracelets for the discounted price of $364.00 each. The members of the wedding party would like special fligree opplied to the bracelets that would increase the direct moterlals cost per brocelet by $12. Imperiat Jewelers would also have to buy a speciat toel for $459 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, $13.00 of the overheod is variable with respect to the number of bracelets produced. The compony also believes thet eccepting this order would have no effect on its ability to produce and sell jeweliy to other customers. Furthermore, the company could fulfil 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
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