Question
Problem 13-24 Effect of order quantity on special order decision LO 13-2 Baird Quilting Company makes blankets that it markets through a variety of department
Problem 13-24 Effect of order quantity on special order decision LO 13-2
Baird Quilting Company makes blankets that it markets through a variety of department stores. It makes the blankets in batches of 1,000 units. Baird made 26,000 blankets during the prior accounting period. The cost of producing the blankets is summarized here.
Materials Cost ($27 per unit x 26,000) | $702,000 |
Labor Cost ($21 per unit x 26,000) | 546,000 |
Manufacturing Supplies ($2 x 26,000) | 52,000 |
Batch-level Costs (26 batches at $4,000 per batch) | 104,000 |
Product-level Costs | 200,000 |
Facility-level Costs | 310,000 |
Total Costs | 1,914,000 |
Cost per unit = 1,914,000 / 26,000 = $73.6 |
Required
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Sunny Motels has offered to buy a batch of 400 blankets for $58 each. Bairds normal selling price is $94 per unit. Calculate the relevant cost per unit for the special order. Based on the preceding quantitative data, should Baird accept the special order?
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Sunny offered to buy a batch of 1,000 blankets for $58 per unit, calculate the relevant cost per unit for the special order. Should Baird accept the special order?
(For all requirements, round "Cost per unit" to 2 decimal places.)
a. | Cost per unit | |
Should Baird accept the special order? | Yes or No | |
b. | Cost per unit | |
Should Baird accept the special order? | Yes or No |
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