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Exercise 6-6A (Algo) Special order decision LO 6-2 Stuart Concrete Company pours concrete slabs for single-family dwellings. Lancing Construction Company, which operates outside Stuart's normal sales territory, asks Stuart to pour 52 slabs for Lancing's new development of homes. Stuart has the capacity to build 430 slabs and is presently working on 180 of them. Lancing is willing to pay only $2,530 per slab. Stuart estimates the cost of a typical job to include unit-level materials, $900; unit-level labor, $430; and an allocated portion of facility-level overhead, $1,290. Required Calculate the contribution to profit from the special order. Should Stuart accept or reject the special order to pour 52 slabs for $2,530 each? Contribution to profit Should Stuart accept or reject the special order? Exercise 6-10A (Algo) Outsourcing decision LO 6-3 Stuart Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high-quality racing bikes with limited sales. Stuart produces and sells only 7,600 bikes each year. Due to the low volume of activity, Stuart is unable to obtain the economies of scale that larger producers achieve. For example, Stuart could buy the handlebars for $38 each; they cost $41 each to make. The following is a detailed breakdown of current production costs. Unit Cost Total Item Unit-level costs Materials Labor Overhead Allocated facility-level costs Total $14 11 2 14 $106,400 83,600 15,200 106,400 $311,600 $41 After seeing these figures, Stuart's president remarked that it would be foolish for the company to continue to produce the handlebars at $41 each when it can buy them for $38 each. Required Calculate the total relevant cost. Do you agree with the president's conclusion? Per Unit Total Total relevant cost Do you agree with the president's conclusion