Problem 13-24A (Algo) Effect of order quantity on special order decision LO 13-2

Zachary Quilting Company makes blankets that it markets through a variety of department stores. It makes the blankets in batches of 1,500 units. Zachary made 30,000 blankets during the prior accounting period. The cost of producing the blankets is summarized here.

Materials cost ($26 per unit 30,000)	$	780,000
Labor cost ($22 per unit 30,000)		660,000
Manufacturing supplies ($3 30,000)		90,000
Batch-level costs (20 batches at $3,000 per batch)		60,000
Product-level costs		320,000
Facility-level costs		390,000
Total costs	$	2,300,000
Cost per unit = $2,300,000 30,000 = $89.50

Required

1. Sunny Motels has offered to buy a batch of 500 blankets for $52 each. Zacharys normal selling price is $91 per unit. Calculate the relevant cost per unit for the special order. Based on the preceding quantitative data, should Zachary accept the special order?

2. Sunny offered to buy a batch of 1,500 blankets for $54 per unit, calculate the relevant cost per unit for the special order. Should Zachary accept the special order?

Check my work Problem 13-24A (Algo) Effect of order quantity on special order decision LO 13-2 Zachary Quilting Company makes blankets that it markets through a variety of department stores. It makes the blankets in batches of 1,500 units. Zachary made 30,000 blankets during the prior accounting period. The cost of producing the blankets is summarized here. Materials cost ($26 per unit x $ 30,000) 780,000 Labor cost ($22 per unit * 30,000) 660,000 Manufacturing supplies ($3 x 30,000) 90,000 Batch-level costs (20 batches at 60,000 $3,000 per batch) Product-level costs 320,000 Facility-level costs 390,000 Total costs $2,300,000 Cost per unit = $2,300,000 = 30,000 = $89.50 Required a. Sunny Motels has offered to buy a batch of 500 blankets for $52 each. Zachary's normal selling price is $91 per unit. Calculate the relevant cost per unit for the special order. Based on the preceding quantitative data, should Zachary accept the special order? b. Sunny offered to buy a batch of 1,500 blankets for $54 per unit, calculate the relevant cost per unit for the special order. Should Zachary accept the special order? (For all requirements, round "Cost per unit" to 2 decimal places.) a. Cost per unit Should Zachary accept the special order? b. Cost per unit Should Zachary accept the special order