Special Order, Traditional Analysis Forello Company manufactures two types of cold-pressed olive oll, Refined oil and Top Quality Oil, out of a joint process. The joint (common) costs incurted are $90,050 for a standard production run that generates 31,800 gallons of Refined 0 Il and 15,900 gallons of Top Qualty Oil. Additional processing costs beyond the split-off poink are $2.30 per galion for Refined Oil and $1.65 per galion for Top Quality OA. Refined oil sells for $4.10 per gallon, whale Top Quality Oil sells for 48.20 per galion ManglareBuono, a supermarket chain, has asked Florello to supply it with 31, 600 gallons of Top Quality Oul at a price of 58 per gallon. MangiareBuono plans to have the oil bottled in 16 -ounce bottles with its own Mangiarefluono label If Fiorello accepts the ardec, it wall save so.29 per gailon in packaging of Top Quality Oul. There is sufficient excess capacity for the order. However, the market foe Refined ou is saturated, and any additional sales of Pefined O.l would take place at a price of 12.98 per galion. Assume that no significant non-unit-level activity. costs are incurred Required: 1. What is the profit normally earned on one production run of Refined oll and Top Quality Oit? 2. Should fiorevlo accept the special order? Special Order, Traditional Analysis Forello Company manufactures two types of cold-pressed olive oll, Refined oil and Top Quality Oil, out of a joint process. The joint (common) costs incurted are $90,050 for a standard production run that generates 31,800 gallons of Refined 0 Il and 15,900 gallons of Top Qualty Oil. Additional processing costs beyond the split-off poink are $2.30 per galion for Refined Oil and $1.65 per galion for Top Quality OA. Refined oil sells for $4.10 per gallon, whale Top Quality Oil sells for 48.20 per galion ManglareBuono, a supermarket chain, has asked Florello to supply it with 31, 600 gallons of Top Quality Oul at a price of 58 per gallon. MangiareBuono plans to have the oil bottled in 16 -ounce bottles with its own Mangiarefluono label If Fiorello accepts the ardec, it wall save so.29 per gailon in packaging of Top Quality Oul. There is sufficient excess capacity for the order. However, the market foe Refined ou is saturated, and any additional sales of Pefined O.l would take place at a price of 12.98 per galion. Assume that no significant non-unit-level activity. costs are incurred Required: 1. What is the profit normally earned on one production run of Refined oll and Top Quality Oit? 2. Should fiorevlo accept the special order
