Problem 4.44 Steve Whitecrow operates a small machine shop. He manufactures one standard product that is available from many other similar businesses, and he also manufactures custom-ordered products. His accountant prepared the following annual income statement. Custom Standard Sales Sales Total $ 47,950 $ 24,810 $72,760 Sales Costs Material Labour Amortization Power Rent Heat and light Other Total costs Income 9,900 18,000 6,100 700 6,500 650 400 42,250 $ 5,700 $ 7,900 17,800 8,500 26,500 3,900 10,000 500 1,200 1,100 7,600 110 760 800 1,200 22,810 65,060 2,000 $ 7,700 The amortization charges are for machines used in the respective product lines. The power charge is apportioned based on an estimate of power consumed. The rent is for the building space, which has been leased for 10 years at $7,600 per year. The rent and the heat and lighting are apportioned to the product lines, based on the amount of floor space occupied. All other costs are current expenses identified with the product line causing them. A valued custom-parts customer has asked Steve if he would manufacture 5,000 special units for her. Steve is working at capacity and would have to give up some other business to take this order. He cannot renege on custom orders already agreed to, but he would have to reduce the output of his standard product by about one-half for a year while producing the specially requested customer part. The customer is willing to pay $6.99 for each part. The material cost will be about $2 per unit, and the labour will be $3.60 per unit. Steve will have to spend $1,900 for a special device that will be discarded when the job is done. Your answer is partially correct. Try again. Calculate and present the following costs related to the 5,000-unit custom order: 1. The incremental cost of the order 29900 2. The full cost of the order (incremental plus allocated fixed costs, such as amortization, rent, etc.) 3. The opportunity cost of taking the order LINK TO TEXT LINK TO TEXT LINK TO TEXT Your answer is partially correct. Try again. Should Steve take the order? X The firm will be approximately $0 better v off by accepting the order. LINK TO TEXT LINK TO TEXT LINK TO TEXT