Question
Question options: Bowunit Company manufactures and sells flower pot stands. The company's normal selling price is $30 per unit. A breakdown of manufacturing cost per
Question options:
Bowunit Company manufactures and sells flower pot stands. The company's normal selling price is $30 per unit. A breakdown of manufacturing cost per unit is provided below:
Direct materials | $5.00 |
Direct labour | $7.50 |
Variable manufacturing overhead | $1.20 |
Fixed manufacturing overhead | $3.30 |
Total manufacturing cost | $17 |
The company receives a special order at $15.8 per unit for 4,000 units and needs to decide whether to accept this special order or not. Assume the company has excess capacity and regular sales will remain the same with or without this special order.
Required:
1. Indicate whether the company's operating income will increase or decrease if it accepts the special order.
Input the number "1" if your answer is an increase.
Input the number "2" if your answer is a decrease.
2. How much is the increase/decrease? Only input the dollar amount.
Do NOT use positive + or negative - or bracket ( ) sign.
Do NOT use 1000 separator.
Do NOT use $ sign.
Round your answer to whole amount.
E.g.: If your answer is an increase of $1,234, input 1234.
If your answer is a decrease of $9,87.1, input 987.
3. Should the company accept this special order or not?
Input the number "1" if your answer is a yes.
Input the number "2" if your answer is a no.
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