Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please explain how you got the answers. Imperial Jewelers is considering a special order for 24 handcrafted gold bracelets to be given as gifts to
Please explain how you got the answers.
Imperial Jewelers is considering a special order for 24 handcrafted gold bracelets to be given as gifts to members of a wedding party. The normal selling price of a gold bracelet is $403.00 and its unit product cost is $261.00 as shown below Direct materials Direct labor Manufacturing overhead $149 82 30 Unit product cost $261 Most of the manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $10 of the overhead is variable with respect to the number of bracelets produced. The customer who is interested in the special bracelet order would like special filigree applied to the bracelets. This filigree would require additional materials costing $9 per bracelet and would also require acquisition of a special tool costing $455 that would have no other use once the special order is completed This order would have no effect on the company's regular sales and the order could be fulfilled using the company's existing capacity without affecting any other order Required 1. What effect would accepting this order have on the company's net operating income if a special price of $363.00 per bracelet is offered for this order? (Enter all amounts as positive values.) Per Total 24 Unit Bracelets Incremental revenue Incremental costs Variable costs Direct materials Direct labor Variable manufacturing overhead Special filigree Total variable cost Fixed costs Purchase of special tool Total incremental cost Incremental net operating income (loss) 2. Should the special order be accepted at this price? O Yes O NoStep 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