Kingbird Inc, manufactures two electronic products, widgets and gadgets, and has a capacity of 2,500 machine hours. Prices and costs for each product are as follows: Widget Gadget $265 $345 Selling price per unit Variable costs per unit Direct materials Other direct costs Variable Manufacturing overhead costs* 32 50 12 27 45 59 *Variable manufacturing overhead costs are applied at a rate of $55 per machine hour. Accustart Industries, a potential client, has offered $265 per unit to Kingbird for 265 special units. These 265 units would incur the following production costs and time: Direct materials $9,595 Other direct costs $4,500 Assume that Kingbird has enough excess capacity to produce the special order. Calculate what the total contribution would be if the special order from Accustart were accepted. Total contribution margin $ Assume that Kingbird 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 decimal places, e.g. 125.) Widget Gadget New Order $ CM per unit $ CM per machine hour Determine whether Kingbird should produce the units for the special order instead of widget or gadget units. Kingbird produce the units for the special order instead of widget or gadget units. Kingbird produce the units for the special order instead of widget or gadget units. Assume that Kingbird is actually operating at 95% of full capacity. Calculate what the opportunity cost would be if Accustart's special order were accepted. Opportunity cost $ Assume that Kingbird is actually operating at 95% of full capacity, and additional machines can be rented at a cost of $36,500 to produce Accustart's special order. If the special order is accepted, calculate its effect on Kingbird's profit. Net profit from doing the special order $ Kingbird Inc, manufactures two electronic products, widgets and gadgets, and has a capacity of 2,500 machine hours. Prices and costs for each product are as follows: Widget Gadget $265 $345 Selling price per unit Variable costs per unit Direct materials Other direct costs Variable Manufacturing overhead costs* 32 50 12 27 45 59 *Variable manufacturing overhead costs are applied at a rate of $55 per machine hour. Accustart Industries, a potential client, has offered $265 per unit to Kingbird for 265 special units. These 265 units would incur the following production costs and time: Direct materials $9,595 Other direct costs $4,500 Assume that Kingbird has enough excess capacity to produce the special order. Calculate what the total contribution would be if the special order from Accustart were accepted. Total contribution margin $ Assume that Kingbird 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 decimal places, e.g. 125.) Widget Gadget New Order $ CM per unit $ CM per machine hour Determine whether Kingbird should produce the units for the special order instead of widget or gadget units. Kingbird produce the units for the special order instead of widget or gadget units. Kingbird produce the units for the special order instead of widget or gadget units. Assume that Kingbird is actually operating at 95% of full capacity. Calculate what the opportunity cost would be if Accustart's special order were accepted. Opportunity cost $ Assume that Kingbird is actually operating at 95% of full capacity, and additional machines can be rented at a cost of $36,500 to produce Accustart's special order. If the special order is accepted, calculate its effect on Kingbird's profit. Net profit from doing the special order $
