Part 2-25 points Acme Widgets Ltd. Produces a single model of the widget. Budgeted production of...

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Part 2-25 points Acme Widgets Ltd. Produces a single model of the widget. Budgeted production of the widget of 1,000 units provides the following income for the forthcoming year: Acme Widgets Ltd. Budgeted Income for this year Sales Volume Sales Revenue Less: Cost of Goods Sold 1,000 units $200,000 140,000 $ 60,000 Gross Margin Less: Selling & Administrative Expense (all fixed) Operating Income $50,000 $10,000 Manufacturing overhead, both fixed and variable, is allocated to the widgets based on normal production using 2,000 direct labor hours: Acme Widgets Ltd. Manufacturing cost/widget Direct Materials Direct Labor Fixed Overhead $ 20.00/unit 2.0 hours/unit 30.00/unit Variable Overhead 2.0 hours/unit 40.00/unit 2.0 hours/unit 50.00/unit $140.00/unit The firm has been approached to produce a one-time order of a specialty widget. The order is for 100 of the specialty widgets at a price of $200/widget. The accountants have provided the following cost per unit of the specialty widget: Acme Widgets Ltd. Manufacturing cost/widget special order widget Direct Materials $35.00/unit Direct Labor 3.0 hours/unit 45.00/unit Variable Overhead 3.0 hours/unit 60.00/unit Fixed Overhead 3.0 hours/unit 75.00/unit $215.00/unit The firm's production manager is hesitant to take the order arguing that selling the product for $200 would be below cost and lose the firm $15 per unit. Part 2-25 points Acme Widgets Ltd. Produces a single model of the widget. Budgeted production of the widget of 1,000 units provides the following income for the forthcoming year: Acme Widgets Ltd. Budgeted Income for this year Sales Volume Sales Revenue Less: Cost of Goods Sold 1,000 units $200,000 140,000 $ 60,000 Gross Margin Less: Selling & Administrative Expense (all fixed) Operating Income $50,000 $10,000 Manufacturing overhead, both fixed and variable, is allocated to the widgets based on normal production using 2,000 direct labor hours: Acme Widgets Ltd. Manufacturing cost/widget Direct Materials Direct Labor Fixed Overhead $ 20.00/unit 2.0 hours/unit 30.00/unit Variable Overhead 2.0 hours/unit 40.00/unit 2.0 hours/unit 50.00/unit $140.00/unit The firm has been approached to produce a one-time order of a specialty widget. The order is for 100 of the specialty widgets at a price of $200/widget. The accountants have provided the following cost per unit of the specialty widget: Acme Widgets Ltd. Manufacturing cost/widget special order widget Direct Materials $35.00/unit Direct Labor 3.0 hours/unit 45.00/unit Variable Overhead 3.0 hours/unit 60.00/unit Fixed Overhead 3.0 hours/unit 75.00/unit $215.00/unit The firm's production manager is hesitant to take the order arguing that selling the product for $200 would be below cost and lose the firm $15 per unit.