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Ivy Corp. has received a request for a special order of 9,000 units of product G4 for $46.43 each. The normal selling price of this
Ivy Corp. has received a request for a special order of 9,000 units of product G4 for $46.43 each. The normal selling price of this product is $51.03 each, but the units would need to be modified slightly for the customer. The normal unit product cost of product G4 is computed as follows: Direct materials $17.91 Diret labor $6.15 Variable manufacturing overhead $3.55 Fixed manufacturing overhead $6.96 Direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like some modifications made to product G4 that would increase the variable costs by $6.18 per unit and that would require a one-time investment of $46206 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. Determine the effect on total net operating income of accepting the special order. Round only your final answer to the nearest dollar and enter a loss as negative, a gain as positive. Kare Co. produces two product lines. Prices/costs follow. Zing Zang Selling price $55 $40 Direct material $16 $12 Direct labor ($20 per hr) $15 $10 Variable overhead $12 $8 Demand for Zing is 200 units and Zang is 300 units Fill in the blanks below: Assuming direct labor is a constrained resource, Kare company should manufacture (Zing/Zang) first because it has the (highest/lowest) per
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