Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Special-Order Decision, Traditional Analysis, Qualitative Aspects Feinan Sports, Inc, manufactures sporting equipment, including weight-lifting gloves. A national sporting goods chain recently submitted a special order

image text in transcribed
image text in transcribed
Special-Order Decision, Traditional Analysis, Qualitative Aspects Feinan Sports, Inc, manufactures sporting equipment, including weight-lifting gloves. A national sporting goods chain recently submitted a special order for 4,000 pairs of weight-lifting gloves. Feinan Sports was not operating at capacity and could use the extra business. Unfortunately, the order's offering price of $12.70 per pair was below the cost to produce them. The controller was opposed to taking a loss on the deal. However, the personnel manager argued in favor of accepting the order even though a loss would be incurred; it would avoid the problem of layolfs and would help maintain the cornmunity image of the company. The full cost to produce a pair of weight-lifting gloves is presented below No variable seling or administrative expenses would be associated with the order. Non-unit-level activity costs are a small percentage of total costs and are therefore not considered. 1. Assume that the company would accept the order only if it increased total profits. Should the company accept or reject the order? Provide supporting computations. If required, round your answers to the nearest cent. Enter a loss as a negative amount. 1. Assume that the company would accept the order only if it increased total profits. Should the company accept or reject the order? Provide supporting computations. If required, round your answers to the nearest cent. Enter a loss as a negative amount. 2. Suppose that Feinan Sports has negotiated with the potential customer, and has determined that it can substitute cheaper materiais, reducing direct materials cost by $0.80 per unit. In addition, the company's engineers have found a way to reduce direct labor cost by $0,40 per unit. 5 bould the company accept or reject the order? Provide supporting computations. If required, round your answers to the nearest cent. Enter a loss as a negative amount

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Knowledge Audit Complete Self Assessment Guide Practical Tools For Self Assesment

Authors: Gerardus Blokdyk

1st Edition

0655199837, 978-0655199830

More Books

Students also viewed these Accounting questions