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Seda Sarkisian makes wedding cakes from her home. A customer has requested two duplicate wedding cakes: one for the wedding and one to be frozen
Seda Sarkisian makes wedding cakes from her home. A customer has requested two duplicate wedding cakes: one for the wedding and one to be frozen for their anniversary. The couple has offered $400 for both cakes instead of $500 ($250 each). The cost information to make one cake is shown. One Cake a. What is the cost for the first cake? Direct materials b. What cost would not be included in the second cake? Direct labor c. What is the cost of the second cake? d. What would be the total cost of this order if the offer was accepted? Variable overhead Fixed overhead e. How much profit will Seda be recording for this special order? f. If your company policy is to always have a 15% profit on all order, would you still accept this order? g. If you would not accept the order, what price would you negotiate? Show all your work and clearly label each of your answers
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