Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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.) (Click
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.) (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, $X.XX, and all other amounts to the nearest whole dollar. En a "O" 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) Data Table Revenue from special order Less variable expense associated with the order: Direct materials Total costs for 80,000 units Direct labor Direct materials $ 272,000 Direct labor Variable manufacturing overhead 48,000 Contribution margin 72,000 80,000 Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing costs Less: Additional fixed expenses associated with the order $ 472,000 Increase (decrease) in operating income from the special order Print Done - More Info The company's relevant range extends to 93,000 units. Print has received a 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 fabric used by Print, which would allow Print to save $0.65 per t-shirt in direct 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 special order
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