Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Simple Products manufacturest-shirts. It has the following costs when its production level is 120,000 units (-shirts): (Click the icon to view the costs.) (Click the
Simple Products manufacturest-shirts. It has the following costs when its production level is 120,000 units (-shirts): (Click the icon to view the costs.) (Click the icon to view additional information ) What will happen to Simple's operating income if it accepts this special order? Total Order Incremental Analysis of Special Sales Order Decision Per Unit 2,000 uits) 6.5 78,000 Revenue from special order Less variable expense associated with the order: Direct materials Direct labor Variable manufacturing overhead Contribution margin Less: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special order Simple accept the special sales order because it will operating income. Enter any number in the edit fields and then continue to the next question. Save for Later Data Table Total costs for 120,000 units Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead 360,000 30,000 72,000 150,000 612,000 Total manufacturing costs Print Done More Info The company's relevant range extends to 137,000 units. Simple has received a special order for 12,000 t-shirts at a special price of $78,000 for the entire order. The special order t-shirt would use a fabric that is less expensive than the standard fabric used by Simple, which would allow Simple to save $0.80 per t-shirt in direct materials when manufacturing this special order. Simple has the excess capacity to manufacture this special order. Its total fixed costs will not be impacted by the special order. Print Done
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started