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Section C: Special Orders Golden Rams Corporation manufactures thermostats for office buildings. The following is the cost of each unit: Materials $36.00 Labor 14.00 Variable

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Section C: Special Orders Golden Rams Corporation manufactures thermostats for office buildings. The following is the cost of each unit: Materials $36.00 Labor 14.00 Variable overhead 4.00 Fixed overhead ($1,800,000 per year, 100,000 units per year) 18.00 $72.00 Total ASU Company has approached Golden Rams with an offer to buy 7.500 thermostats at a price of $60 each. The regular selling price is $100. Golden Rams has the capacity to produce the 7,500 additional units without affecting the current production of 100,000 units. ASU requires that each unit use its branding, which requires a more expensive label, resulting in an additional $2 per unit material cost. The labor cost of affixing the label will be the same as for the current models. ASU order will also require a one-time rental of packaging equipment for $20,000 1. Prepare a schedule to show the impact of filing the ASU order on Golden Rams Corporation's profits for the year 2. Would you recommend that Golden Rams Corporation accept the order

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