Question 3: Special Order (7 Marks) Part A: BearStuff Enterprises produces giant stuffed bears. Management has provided the following cost and revenue information Selling price per bear $ 50.00 Variable product costs per bear 20.00 Total Fixed costs (product and period) $ 50,000 ulu A wholesaler has indicated they would like to make a special order. The company will incur additional shipping costs for the special order as indicated below. Other information for the special order is as follows: ni Units in special order 12,000 o Selling price per bear for the special order $ 25.00 11 Shipping costs per bear (incurred by BearStuff) $ 3.00 72 Assume the special order will not impact sales to regular customers. If BearStuff accepts the special order, they will need to purchase a new piece of equipment costing $40,000. 13 Cost of new equipment for the special order $ 40,000 15 Determine the following if the company were to accept the special order (show all amounts as positive numbers): (5 marks) 16 17 14 Revenue from Special Order 18 Total Variable Costs incurred for Special Order 10 Determine the following if the company were to accept the special order (show all amounts as positive numbers): (5 marks) Revenue from Special Order 8 Total Variable Costs incurred for Special Order 19 Contribution Margin from Special Order 20 Fixed Costs of Special Order 21 Increase in Profit (Loss) if Special Order is Accepted 22 23 Based on the quantitative analysis, should the special order be 24 accepted (yes or no) - 1 mark? 25 26 Part B: What is a qualitative (non-financial) factor to consider when looking at a special order? (1 marks) 27 28 29 30