PA7-1 (Static) Analyzing Special-Order Decision [LO 7-2, 7-3) Mohave Corp. makes several varieties of beach umbrellas and accessories. It has been approached by a company called Lost Mine Industries about producing a special order for a custom umbrella called the Ultimate Shade (US). The special order umbrellas with the Lost Mine Company logo would be distributed to participants at an upcoming convention sponsored by Lost Mine. Lost Mine has offered to buy 1,500 of the US umbrellas at a price of $11 each. Mohave currently has the excess capacity necessary to accept the offer. The following information is related to the production of the US umbrella Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost Regular sales price $5.00 2.00 3. Se 2.50 $13.00 $19.00 Required: 1. Compute the incremental profit (or loss) from accepting the special order. 2. Should Mohave accept the special order? 3. Suppose that the special order had been to purchase 2,000 umbrellas for $9.00 each. Recompute the incremental profit (or loss) from accepting the special order under this scenario. 4. Assume that Mohave is operating at full capacity. Calculate the special-order price per unit at which Mohave would be indifferent between accepting or rejecting the special order Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the incremental profit (or loss) from accepting the special order. Profit (or Loss) by PA 7.1 (Static) Analyzing Special-Order Decision (LO 7-2, 7-3] Mohave Corp. makes several varieties of beach umbrellas and accessories. It has been approached by a company called Lost Mine Industries about producing a special order for a custom umbrella cated the Ultimate Shade (US) The special order umbrellas with the Lost Mine Company logo would be distributed to participants at an upcoming convention sponsored by Lost Mine Lost Mine has offered to buy 1500 of the US umbrellas at a price of $11 each Mohave currently has the excess capacity necessary to accept the offer. The following information is related to the production of the US umbrella Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhet Total cost Regular sales prie 55. 2. 3 2 $19 Required: 1. Compute the incremental profit or loss from accepting the special order 2. Should Mohave accept the special order? 3. Suppose that the special order had been to purchase 2.000 umbrellas for $9.00 each Recompute the incremental profit for loss from accepting the special order under this scenario 4. Assume that Mohave is operating at full capacity Calculate the special-order price per unit at which Mchave would be indifferent between accepting or rejecting the special order. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Should Mohave accept the special order? Yes No PA71 (Static) Analyzing Special-Order Decision [LO 7-2, 7-3] Mohave Corp. makes several varieties of beach umbrellas and accessories. It has been approached by a company called Lost Mine Industries about producing a special order for a custom umbrella called the Ultimate Shade (US). The special order umbrellas with the Lost Mine Company logo would be distributed to participants at an upcoming convention sponsored by Lost Mine. Lost Mine has offered to buy 1,500 of the US umbrellas at a price of $11 each. Mohave currently has the excess capacity necessary to accept the offer. The following information is related to the production of the US umbrella $ 5.00 2.00 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost Regular sales price $13.00 $19.00 Required: 1. Compute the incremental profit (or loss) from accepting the special order. 2. Should Mohave accept the special order? 3. Suppose that the special order had been to purchase 2,000 umbrellas for $9.00 each. Recompute the incremental profit or loss) from accepting the special order under this scenario 4. Assume that Mohave is operating at full capacity Calculate the special-order price per unit at which Mohave would be indifferent between accepting or rejecting the special order Complete this question by entering your answers in the tabs below. Required Required 2 Required 3 Required 4 Suppose that the special order had been to purchase 2,000 umbrellas for $9.00 each. Recompute the incremental profit (or loss) from accepting the special order under this scenario. Profit (or Loss) PA7-1 (Static) Analyzing Special-Order Decision (LO 7-2, 7-3] Mohave Corp. makes several varieties of beach umbrellas and accessories. It has been approached by a company called Lost Mine Industries about producing a special order for a custom umbrella called the Ultimate Shade (US). The special-order umbrellas with the Lost Mine Company logo would be distributed to participants at an upcoming convention sponsored by Lost Mine. Lost Mine has offered to buy 1,500 of the US umbrellas at a price of $11 each. Mohave currently has the excess capacity necessary to accept the offer. The following information is related to the production of the US umbrella: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total cost Regular sales price $ 5.00 2.00 3.50 2.50 $13.00 $19.00 Required: 1. Compute the incremental profit for loss) from accepting the special order 2. Should Mohave accept the special order? 3. Suppose that the special order had been to purchase 2,000 umbrellas for $9.00 each. Recompute the incremental profit (or loss) from accepting the special order under this scenario 4. Assume that Mohave is operating at full capacity Calculate the special order price per unit at which Mohave would be indifferent between accepting or rejecting the special order Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Assume that Mohave is operating at full capacity, Calculate the special-order price per unit at which Mohave would be indifferent between accepting or rejecting the special order. Special Order Price per Unit
