Miyamoto Jewelers is considering a special order for 10 handcrafted gold bracelets to be given as gifts to members of a wedding party. The normal selling price of a gold bracelet is $390 and its unit product cost is $264.00 as shown below

Direct materials	$143.00
Direct labor	86.00
Manufacturing Overhead	35.00
Unit Product Cost	264.00

Most of the manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $7 of the overhead is variable with respect to the number of bracelets produced. The customer who is interested in the special bracelet order would like special filigree applied to the bracelets. This filigree would require additional materials costing $6 per bracelet and would also require acquisition of a special tool costing $470 that would have no other use once the special order is completed. This order would have no effect on the company's regular sales and the order could be fulfilled using the company's existing capacity without affecting any other order.

What effect would accepting the special order have on Miyamoto's total income if a special price of $350 is offered per bracelet for the order? Should the special order be accepted at this price?

The answer is Yes, because Miyamoto's income is increased by $330 if it accepts the order

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Miyamoto Jewelers is considering a special order for 10 handcrafted gold bracelets to be given as gifts to members of a wedding party. The normal selling price of a gold bracelet is $390 and its unit product cost is $264.00 as shown below Most of the manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $7 of the overhead is variable with respect to the number of bracelets produced. The customer who is interested in the special bracelet order would like special filigree applied to the bracelets. This filigree would require additional materials costing $6 per bracelet and would also require acquisition of a special tool costing $470 that would have no other use once the special order is completed. This order would have no effect on the company's regular sales and the order could be fulfilled using the company's existing capacity without affecting any other order. What effect would accepting the special order have on Miyamoto's total income if a special price of $350 is offered per bracelet for the order? Should the special order be accepted at this price? Yes, because Miyamoto's income is increased by $1,080 if it accepts the order. Yes, because Miyamoto's income is increased by $800 if it accepts the order Yes, because Miyamoto's income is increased by $610 if it accepts the order. Yes, because Miyamoto's income is increased by $390 if it accepts the order. Yes, because Miyamoto's income is increased by $330 if it accepts the order