Answered step by step
Verified Expert Solution
Question
1 Approved Answer
omework: Assignment 8 re: 0 of 1 pt 2 of 6 (0 3-4 (similar to) uxury Products manufactures t-shirts. It has the following costs when
omework: Assignment 8 re: 0 of 1 pt 2 of 6 (0 3-4 (similar to) uxury Products manufactures t-shirts. It has the following costs when its production level is 115,000 units (t-shirts) (Click the icon to view the costs ) (Click the icon to view additional information) What will happen to Luxury's operating income it it accepts this special order? Complete the following incremental analysis to determine the impact on Luxury's operating income if it accepts this special order. (Round all per unit amounts to the near contribution margin and/or operating income from the special order) Total Order 0 Data Table Incremental Analysis of Special Sales Order Decision Per Unit (11.500 units) Revenue from special order Less variable expense associated with the order: Total costs for Direct materials 115,000 units Direct labor Direct materials 322,000 Variable manufacturing overhead Direct labor 34,500 Contribution margin Variable manufacturing overhead 80.500 Loss Additional fixed expenses associated with the order Fixed manufacturing overhead 80,000 Total manufacturing costs 517.000 Increase (decrease in operating income from the special order More Info - X Print Done The company's relevant range extends to 131.500 units Luxury has received a special order for 11.500 t-shirts at a special price of $77625 for the entire order The special order t-shirt would use a fabric that is less expensive than the standard fabel used by Luxury which would allow Luxury to save $0.40 per I-shirt in direct materials when manufacturing this special order Luxury has the excess capacity to manufacture this special order its total fixed costs will not be impacted by the special order Print Done
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started