total	apples pies	candy apples
sales price (price unit)		20	7.50
expected sales (for september)	13000	5250	7750
expected manufacturing cost	total	apples pies	candy apples
fixed OH (per month)	18750	16500	2250
Direct labor (per unit)		3.50	1.90
direct material (per unit)		2.50	1.60
variable Oh (per unit)		1.50	0.70
expected marketing and admin costs
fixed costs (per month)	5000	3750	1250
variable costs (per unit)		1.25	0.25

Additionally Sally informed her that farm received a special oreder to sell their apple pies and caramel apples at the local fair in September. Sally wanted to sell 2000 pies and 3000 caramel apples for a discounted price of $17 and $5.50 respectively. With the amount of staff and size of the bakery, Nikki determined that the maximum capacity for the bakery is 2000 labor hours a month. At the current projected sale amounts she espects that thell need 1625 hours to meet their regular sales volume. After review of the salaries of all staff Nikki determined that the average hourly wage was $13. Ned was also concerned about how much it cost to keep apple pie inventory on hand at the end of the month caramel apples have to be sold within a couple days so no inventory is left at the end of the month.Since there is a limit shelf life for the apple pies,Ned and Sally try and keep the ending inventories low. They are hoping to have only 250 apple pies in progress at the end of the month and 35o finished pies. They think that the associated costs for these inventories will be $675 for the in progress pies and $3125 for the finished pies. They started production for September sale of apple pies at the end of August. At the end of August there were 500 pies that were 50% completed in progress and no finished pies. The variable cost associated with these inventories were as follow

	DM	DL
Begining WIP inventory(50% completed as to labor)	1125	1300
September costs	17750	18200

And the conversion cost for the in progree pies 50% and 75% of direct labor is applied to overhead. (Use the expected for September apple pies sales for determining units started and units completed and transferred out.September was a success for the bakery.They were able to complete the specialn order and with some overtime baked a few more pies.Here were the results for the actual sales and costs at the month.

	total	apples pies	candy apples
Actual sales price(per unit)		$22.50	$7.00
actual sales	17750	7250	10500
actual variable manufacturing OH	81625
actual variable marketing and admin cost	15125
actual fixed manufacturing costs	16750
actual marketing and admin costs	5250

A) Labor hours required for special order

Product	labor cost per unit	wage rate per hour	labor hours per unit	special order quantity	total hours required
apples pies
caramelapples

B)Incremental profit(loss) on special order

Differential revenues	apples pies	caramel apple	total
special order units
selling price
incremental revenue
Differential cost
special oreder units
total variable costs
differential cost
Differential profit(loss)

If labor hours for the additional 5000 units combined then regular production will need to be reduced for the product with the lowes contribution margin

Bakery capacity(in direct-labor hours)
Capacity used for special order
Capacity available for regular orders

C)Compute contribution margin per hours for regular order

	apple pies	caramel apples
Revenue per unit
variable cost per unit
contribution margin per unit
direct-labor hours per unit
contribution margin per hour

D)Compute contribution argin lost from regular sales

Lowest contribution margin per hour
Hours over capacity
total lost contribution margin

E)Total contribution margin with special order

Special order	apple pies	caramel apple	total
CM per unit
Number of units
Special order CM
Regular production
CM per unit
number of units
regular production CM
total contribution margin

Regular production contribution margin
Difference in profit with special order