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Ironwood Company manufactures a variety of sunglasses. Production information for its most popular line, the Clear Vista (CV), follows: Sales price Direct materials Direct labor
Ironwood Company manufactures a variety of sunglasses. Production information for its most popular line, the Clear Vista (CV), follows: Sales price Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing cost Per Unit $ 51.50 20.00 10.00 6.00 5.00 $ 41.00 Suppose that Ironwood has been approached about producing a special order for 2,800 units of custom CV sunglasses for a new semiprofessional volleyball league. All units in the special order would be produced in the league's signature colors with a specially designed logo emblem attached to the side of the glasses. The league has offered to pay $49.00 per unit in the special order. Additional costs for the special order total $3.00 per unit for mixing the special frame color and purchasing the emblem with the league's logo that will be attached to the glasses Required: 1. Assume Ironwood has the idle capacity necessary to accommodate the special order. Calculate the additional contribution margin Ironwood would make by accepting the special order. 2-a. Calculate the current contribution margin per unit. 2-b. Suppose Ironwood is currently operating its production facility at full capacity and accepting the special order would mean reducing production of its regular CV model. Should Ironwood accept the special order in this case? 3. Calculate the special order price per unit at which Ironwood is indifferent between accepting or rejecting the special order. ces Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Reg 3 Assume Ironwood has the idle capacity necessary to accommodate the special orde margin Ironwood would make by accepting the special order. Additional CM Re 1 Req 2A > Wholesome Dairy processes milk. The cost of the milk processing is $1,320,000. Wholesome is looking to increase its net income and is exploring the possibility of expanding its products to include cream and/or ice cream. It takes 2 gallons of milk to make a half gallon of ice cream. Additional Proces Product Milk Ice Cream Units Produced Selling Price 792,000 gallons $ 3.94 per gallon 6.12 per half gallon $ 0.27 per half g Required: 1. How many half gallons of ice cream can Wholesome make? 2. What are the additional processing costs to convert the milk to ice cream? 3. Should Wholesome sell the milk or process it further and sell ice cream? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 How many half gallons of ice cream can Wholesome make? Number of half gallons of ice cream Required 1 Required 2 >
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