Ivanhoe Inc. manufactures two electronic products, widgets and gadgets, and has a capacity of 3,500 machine hours. Prices and costs for each product are as follows:

		Widget		Gadget
Selling price per unit		$270		$355
Variable costs per unit
Direct materials		36		60
Other direct costs		16		37
Variable Manufacturing overhead costs*		55		69

* Variable manufacturing overhead costs are applied at a rate of $65 per machine hour. Duffy Dog Industries, a potential client, has offered $275 per unit to Ivanhoe for 275 special units. These 275 units would incur the following production costs and time:

Direct materials		$10,425
Other direct costs		$5,500
Machine hours		250

Assume that Ivanhoe has enough excess capacity to produce the special order. Calculate what the total contribution would be if the special order from Duffy Dog were accepted.

Total contribution margin

$enter the total contribution margin in dollars

Assume that Ivanhoe is currently operating at full capacity. Calculate the contribution margin per unit and per machine hour. (Round machine hours to 2 decimal places, e.g. 12.25 and final answers to 0 decimal places, e.g. 125.)

		Widget		Gadget		New Order
CM per unit		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
CM per machine hour		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount

Determine whether Ivanhoe should produce the units for the special order instead of widget or gadget units.

Ivanhoe select an option should notshould produce the units for the special order instead of widget or gadget units.

Assume that Ivanhoe is actually operating at 95% of full capacity. Calculate what the opportunity cost would be if Duffy Dogs special order were accepted.

Opportunity cost

$enter the opportunity cost in dollars

Assume that Ivanhoe is actually operating at 95% of full capacity, and additional machines can be rented at a cost of $37,500 to produce Duffy Dogs special order. If the special order is accepted, calculate its effect on Ivanhoes profit.

Net profit from doing the special order

$enter the net profit from doing the special order in dollars