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Problem 6-25A (Algo) Effect of order quantity on special order decision LO 6-2 Dalton Quilting Company makes blankets that it markets through a variety
Problem 6-25A (Algo) Effect of order quantity on special order decision LO 6-2 Dalton Quilting Company makes blankets that it markets through a variety of department stores. It makes the blankets in batches of 1,100 units. Dalton made 21,000 blankets during the prior accounting period. The cost of producing the blankets is summarized here. Materials cost ($10 per unit x 21,000) Labor cost ($9 per unit x 21,000) Manufacturing supplies ($1.50 x 21,000) Batch-level costs (20 batches at $2,475 per batch) Product-level costs Facility-level costs Total costs Cost per unit = $716,250 21,000 = $34.11 Required $ 210,000 189,000 31,500 49,500 84,000 152,250 $ 716,250 a. Sunny Motels has offered to buy a batch of 550 blankets for $24 each. Dalton's normal selling price is $45 per unit. Calculate the relevant cost per unit for the special order. Based on the preceding quantitative data, should Dalton accept the special order? b. Sunny offered to buy a batch of 1,100 blankets for $24 per unit. Calculate the relevant cost per unit for the special order. Should Dalton accept the special order? Note: For all requirements, round "Cost per unit" to 2 decimal places. a. Cost per unit a. Should Dalton accept the special order? b. Cost per unit No b. Should Dalton accept the special order? Yes
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