Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Medallion company manufactures medals for sports club awards. Its plant has a capacity to produce 20,000 medals per month. Current production and sales are

image text in transcribed
The Medallion company manufactures medals for sports club awards. Its plant has a capacity to produce 20,000 medals per month. Current production and sales are 15,000 medals per month. The company normally sells the medals for $140 per medal. The cost information for the company is as follows: Variable costs that vary with number of units produced Total Direct materials $525,000 Total Direct labour 480,000 Other variable costs that vary with number of batches 150 batches of 50 medals per batch at $500 per batch Other costs include Fixed manufacturing cost $275,000 Fixed marketing cost 175,000 The Medallion company has received a Special order for 5000 medals at $90 per medal. This will have no effect on the company's regular business. For the special order the company would make 50 batches of 100 medals per batch. Required: (a)Should the Medal company accept the special order? Show calculations (b)Are there any other factors that should be considered

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

Business Intelligence For New-Generation ManagersCurrent Avenues Of Development

Authors: Jörg H. Mayer, Reiner Quick

6th Edition

3319156950, 9783319156958

More Books

Students also viewed these Accounting questions