Project $3$

Question $1$ of $6$

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These coolers resemble kayaks but are about one$-$third the size. They are used to float food and beverages while paddling down the river on a weekend leisure trip. The company would be interested in purchasing $110$ coolers for the upcoming summer. It is willing to pay $$250$ per cooler. The brewing company would pick up the coolers upon completion of the order.

Mike met with Diane Buswell, controller, to identify how much it would cost Current Designs to produce the coolers. After careful analysis, the following costs were identified.

$\backslash$table$[[$Direct materials,$$75,/$unit$],[$Direct labor,$$65,/$unit$],[$Variable overhead,$$21,/$unit$]]$

Current Designs would be able to modify an existing mold to produce the coolers. The cost of these modifications would be approximately $$3,200.$ Current Designs has sufficient capacity to produce the special order without impacting current operations.

$($a$)$

Prepare an incremental analysis to determine whether Current Designs should accept this special order to produce the coolers. $($Enter decrease in net income then enter with a negative sign preceding the number or parenthesis, e$.$g$.-15,000$ or $(15,000).)$