question 4

Exercise 13-4 (Algo) Special Order Decision [LO13-4] Imperial Jewelers manufactures and sells a gold bracelet for $403.00. The company's accounting system says the unit product cost for this bracelet is $268.00, as shown below: A wedding party has approached imperial Jewelers about buying 22 gold bracelets for the discounted price of $363.00 each. The wedding party would the special filigree appled to the brocelets that would increase the direct materials cost per bracelet by $5. Imperial Jewelers would hove to buy o special tool for $460 to spply the filgree to the bracelets. The special tool would have no other use once the speciat order is completed To analyze this special order, imperial Jewelers deternined most of its manufacturing overheod is fixed and unaffected by variations in how much jeweiry is produced in any owen period. However, $6.00 of the overhead is variable with respect to the numbet of bracelets produced. The company also believes accepting this order would hove no effect on its ability to produce and seil jeweiry to other customers. Furthermore, the company could fulfill the wedding party sorder using existing manufacturing eapacity. Required: 1. What is the financial advantage (disadvantage) of acceptina the wedoing partys special order? 2. Shouid the company accept the special order? Complete this question by entering your answers in the tabs below. What is the financial aovantage (disadyantage) of accepting the wedding party's special order