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The Medal Plus Company manufactures windows. Its manufacturing plant has the capacity to produce 11,000 windows each month. Current production and sales are 10,000 windows
The Medal Plus Company manufactures windows. Its manufacturing plant has the capacity to produce 11,000 windows each month. Current production and sales are 10,000 windows per month. The company normally charges $250 per window. Variable costs that vary with number of units produced Direct materials 400,000 350,000 Direct manufacturing labor Variable costs (for setups, materials handling, quality control, and so on) that vary with number of batches, 40 batches * $800 per batch Fixed manufacturing costs 32,000 300,000 150,000 Fixed marketing costs $ 1,232,000 Total costs Medal Plus has just received a special one-time-only order for 1,000 windows at $200 per window. Accepting the special order would not affect the company's regular business or its fixed costs. Medal Plus makes windows for its existing customers in batch sizes of 250 windows (40 batches * 250 windows per batch = 10,000 windows). The special order requires Medal Plus to make the windows in 8 batches of 125 windows. Requirement 1. Should Medal Plus accept this special order? Show your calculations. Begin by completing an analysis, and start by showing the computation of the company's operating income without the special order. Next, calculate operating income with the special order, and then calculate the differences between the two columns. (Complete all input fields. For amounts with no change, make sure to enter "0" in the appropriate cells of the Difference column.) Without One-Time Only Special Order 10,000 Windows Revenues Variable costs: Direct materials Direct manufacturing labor Batch manufacturing costs Fixed costs: Fixed manufacturing costs Fixed marketing costs Total costs Operating income
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