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Requirement 2. Suppose plant capacity were only 17,500 windows instead of 20,000 windows each month. The special order must either be taken in full or
Requirement 2. Suppose plant capacity were only 17,500 windows instead of 20,000 windows each month. The special order must either be taken in full or be rejected completely. Should Gold Plus accept the special order? Show your calculations. Complete the analysis below to determine if Gold Plus should accept the special order under this scenario. Revenues Variable costs: Direct materials Direct manufacturing labor Batch manufacturing costs Fixed costs: Fixed manufacturing costs Fixed marketing costs Total costs Operating income With One-Time Only Special Order Under Reduced Plant Capacity 17,500 Windows 2625000 Data table Variable costs that vary with number of units produced Direct materials $ 300,000 Direct manufacturing labor 150,000 Variable costs (for setups, materials handling, quality control, and so on) that vary with number of batches, 300 batches x $1,250 per batch 375,000 Fixed manufacturing costs Fixed marketing costs Total costs 100,000 55,000 $ 980,000 Print Done
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