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Print Products manufactures t-shirts. It has the following costs when its production level is 80,000 units (t-shirts): (Click the icon to view the costs.) i
Print Products manufactures t-shirts. It has the following costs when its production level is 80,000 units (t-shirts): (Click the icon to view the costs.) i (Click the icon to view additional information.) What will happen to Print's operating income if it accepts this special order? Complete the following incremental analysis to determine the impact on Print's operating income if it accepts this special order. (Round all per unit amounts to the nearest cent, $XXX, and all other amounts to the nearest whole dollar. Enter a "0" for any zero balances. Use parentheses or a minus sign to indicate a decrease in contribution margin and/or operating income from the special order.) Total Order Incremental Analysis of Special Sales Order Decision Per Unit (8,000 units) Revenue from special order Less variable expense associated with the order: Direct materials Direct labor Variable manufacturing overhead Contribution margin Less: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special order - X X More Info Data Table The company's relevant range extends to 93,000 units. Print has received a Total costs for 80,000 units special order for 8,000 t-shirts at a special price of $38,000 for the entire order. The special order t-shirt would use a fabric that is less expensive than the standard Direct materials 272,000 fabric used by Print, which would allow Print to save $0.65 per t-shirt in direct Direct labor 48,000 materials when manufacturing this special order. Print has the excess capacity to manufacture this special order. Its total fixed costs will not be impacted by the Variable manufacturing overhead 72,000 special order. 80,000 Fixed manufacturing overhead 472,000 Total manufacturing costs Print Done Print Done
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