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Sparrow Rollers Company produces bikes. Each bike has the following costs: Direct Materials $ 6 . 0 0 Direct Labor $ 1 1 . 0
Sparrow Rollers Company produces bikes. Each bike has the following costs:
Direct Materials $
Direct Labor $
Variable Manufacturing Overhead $
Allocated Fixed Manufacturing Overhead $
Unit Cost $
Note: The fixed manufacturing overhead is common to the company.
The production capacity is units per year. However, Sparrow Rollers expects to produce only units for the coming year. The company also has fixed selling costs of $ per year and variable selling costs of $ per unit sold. Each bike normally sells for $ each.
Recently, a customer offered to buy bikes at a special price of $ each. This order would not have any variable selling costs because no sales commissions are involved.
Based on a quantitative analysis, should the company accept the special order?
Do not enter dollar signs or commas in the input boxes.
Use the negative sign for values that must be subtracted and negative values.
Total Revenues $Answer
Total Direct Materials $Answer
Total Direct Labor $Answer
Total Variable Overhead $Answer
Incremental Operating Income $Answer
The special order should be: Answer
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