problem 1:

problem 2:

Imperiat Jewelers manufactures and selks a gold bracelet for $406.00. The company's accounting system sayn that the unit product cost for this bracelet is $260.00 as shown below: The members of a wedding party have approached Imperial Jewelers about buying 29 of these gold bracelets for the discounted price of $366.00 each. The members of the wedding party would like special fligree applied to the bracelets that would increase the direct materials cost per bracelet by $8. Imperial Jewelers would also have to buy a special tool for $467 to apply the filigree to the bracelets. The special tool would have no other use once the special order is completed To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $9.00 of the ovechead is variabie with respect to the number of bracelets produced. The company aiso believes that accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party's order using its existing manufacturing capacity. Required: 1. What is the financial advantage (disadvantage) of accepting the special order from the wedding party? 2. Should the company accept the special order? (Prepared from a situation suggested by Professor John W. Hardy) Lone Star Meat Packers is a major processor of beef and other meat products. The company has a large amount of T-bone steak on hand, and it is trying to decide whether to sell the T-bone steaks as they are initially cut or to process them further into filet mignon and the New York cut. If the T-bone steaks are sold as initially cut, the company figures that a 1-pound T-bone steak would yield the following profit: If the company were to further process the T-bone steaks, then cutting one side of a T-bone steak provides the filet mignon and cutting the other side provides the New York cut. One 16-ounce T-bone steak cut in this way will yield one 6 -ounce filet mignon and one 8-ounce New York cut; the remaining ounces are waste. It costs $018 to further process one T-bone steok into the filet mignon and New York cuts. The filet mignon can be sold for $4.40 per pound, and the New York cut can be sold for $3.70 por pound. Required: 1. What is the financial advantage (disadvantage) of further processing one T-bone steak into fliet mignon and New York cut steaks? 2. Would you recommend that the T-bone steaks be sold as initially cut or processed further? Imperiat Jewelers manufactures and selks a gold bracelet for $406.00. The company's accounting system sayn that the unit product cost for this bracelet is $260.00 as shown below: The members of a wedding party have approached Imperial Jewelers about buying 29 of these gold bracelets for the discounted price of $366.00 each. The members of the wedding party would like special fligree applied to the bracelets that would increase the direct materials cost per bracelet by $8. Imperial Jewelers would also have to buy a special tool for $467 to apply the filigree to the bracelets. The special tool would have no other use once the special order is completed To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $9.00 of the ovechead is variabie with respect to the number of bracelets produced. The company aiso believes that accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party's order using its existing manufacturing capacity. Required: 1. What is the financial advantage (disadvantage) of accepting the special order from the wedding party? 2. Should the company accept the special order? (Prepared from a situation suggested by Professor John W. Hardy) Lone Star Meat Packers is a major processor of beef and other meat products. The company has a large amount of T-bone steak on hand, and it is trying to decide whether to sell the T-bone steaks as they are initially cut or to process them further into filet mignon and the New York cut. If the T-bone steaks are sold as initially cut, the company figures that a 1-pound T-bone steak would yield the following profit: If the company were to further process the T-bone steaks, then cutting one side of a T-bone steak provides the filet mignon and cutting the other side provides the New York cut. One 16-ounce T-bone steak cut in this way will yield one 6 -ounce filet mignon and one 8-ounce New York cut; the remaining ounces are waste. It costs $018 to further process one T-bone steok into the filet mignon and New York cuts. The filet mignon can be sold for $4.40 per pound, and the New York cut can be sold for $3.70 por pound. Required: 1. What is the financial advantage (disadvantage) of further processing one T-bone steak into fliet mignon and New York cut steaks? 2. Would you recommend that the T-bone steaks be sold as initially cut or processed further