(NEED HELP WITH THIS EQUATION AND WHAT GOES IN IT) Requirement 3. As in requirement 1, assume that monthly capacity is 6,000 windows.
Good Job is concerned that if it accepts the special order, its existing customers will immediately demand a price discount of
$5 in the month in which the special order is being filled. They would argue that Good Job's capacity costs are now being spread over more units and that existing customers should get the benefit of these lower costs. Should Good Job accept the special order under these conditions? Show your calculations.
Select the labels and then enter the amounts to calculate the net effect on operating income from accepting the special order under this scenario. (Use a minus sign or parentheses to show a net decrease in operating income from accepting the special order. Abbreviations used: Operating income = OI; Special order = SO.)
Requirement 1. Should Good Job accept this special order? Show your calculations. Begin by completing an analysis, and start by showing the computation of the company's operating income without the special order. Next, calculate operating income with the special order, and then calculate the differences between the two columns. Difference column.) Without With One-Time Only One-Time Only Special Order Special Order Difference 5,000 Windows 6,000 Windows 1,000 Windows Revenues $ 1,000,000 $ 175,000 1.175,000 $ Variable costs: Direct materials $ 150,000 $ 180,000 $ 30,000 Direct manufacturing labor 75,000 90,000 15,000 Batch manufacturing costs 200,000 210,000 10,000 Fixed costs: : Fixed manufacturing costs 15,000 15,000 0 Fixed marketing costs 25,000 25,000 0 $ Total costs 465,000 S 520,000 $ 55,000 $ 535,000 $ 655,000 $ 120,000 Operating income Based on the above calculations, Good Job should accept the one-time only special order if it has no long-term implications because accepting the order increases operating income by $ 120,000 Without With One-Time Only One-Time Only Special Order Special Order Difference 5,000 Windows 6,000 Windows 1,000 Windows Revenues s 1,000,000 $ 1.175,000 $ 175,000 Variable costs: Direct materials 150,000 $ 180,000 $ 30,000 Direct manufacturing labor 75,000 90,000 15,000 Batch manufacturing costs 200,000 210,000 10,000 Fixed costs: Fixed manufacturing costs 15,000 15,000 0 Fixed marketing costs 25,000 25,000 Total costs 465,000 $ 520,000 $ 55,000 Operating income 535,000 $ 655,000 $ 120,000 Based on the above calculations, Good Job should accept the one-time only special order if it has no long-term implications because accepting the order increases operating income by $ 120,000 0 With One-Time Only Special Order Under Reduced Plant Capacity 5,500 Windows Revenues 1,075,000 Variable costs: Direct materials 165,000 Direct manufacturing labor 82,500 Batch manufacturing costs 190,000 Fixed costs: Fixed manufacturing costs 15,000 Fixed marketing costs 25,000 $ Total costs 477,500 Operating income 597,500 Based on the calculations under this scenario, Good Job should accept reduced capacity because accepting the order increases operating income by $ the one-time only special order under the $ 62,500 Requirement 2. Suppose plant capacity were only 5,500 windows instead of 6,000 windows each month. The special order must either be taken in full or be rejected completely. Should Good Job accept the special order? Show your calculations. Complete the analysis below to determine if Good Job should accept the special order under this scenario. With One-Time Only Special Order Under Reduced Plant Capacity 5.500 Windows $ 1,075,000 Revenues s 165,000 82,500 190,000 Variable costs: Direct materials Direct manufacturing labor Batch manufacturing costs Fixed costs: Fixed manufacturing costs Fixed marketing costs Total costs 15,000 25,000 $ 477,500 $ 597,500 Operating income Based on the calculations under this scenario, Good Job should accept reduced capacity because accepting the order increases operating income by the one-time only special order under the 62,500 Data Table 150,000 75,000 Variable costs that vary with number of units produced Direct materials Direct manufacturing labor Variable costs (for setups, materials handling, quality control, and so on) that vary with number of batches, 200 batches * $1,000 per batch Fixed manufacturing costs Fixed marketing costs Total costs 200,000 15,000 25,000 465,000 $ Print Done X More Info Good Job has just received a special one-time-only order for 1,000 windows at $175 per window. Accepting the special order would not affect the company's regular business or its fixed costs. Good Job makes windows for its existing customers in batch sizes of 25 windows (200 batches * 25 windows per batch = 5,000 windows). The special order requires Good Job to make the windows in 10 batches of 100 windows. Print Done Requirements 1. Should Good Job accept this special order? Show your calculations. 2. Suppose plant capacity were only 5,500 windows instead of 6,000 windows each month. The special order must either be taken in full or be rejected completely. Should Good Job accept the special order? Show your calculations. 3. As in requirement 1, assume that monthly capacity is 6,000 windows. Good Job is concerned that if it accepts the special order, its existing customers will immediately demand a price discount of $5 in the month in which the special order is being filled. They would argue that Good Job's capacity costs are now being spread over more units and that existing customers should get the benefit of these lower costs. Should Good Job accept the special order under these conditions? Show your calculations. Print Done Net increase (decrease) in Ol from accepting SO Net increase (decrease) in Ol from accepting So Decrease in Ol from accepting So Increase in Ol from accepting so Ol gained from existing customers Ol lost from existing customers Der in the input fields and then click Check Answer. Net increase (decrease) in Ol from accepting so ck Answer Decrease in Ol from accepting SO Choose from any list or enter any numbe Increase in Ol from accepting so Ol gained from existing customers part Ol lost from existing customers remaining
