Transcribed image text: 1. The Fluffy Company manufactures slippers and sells them at $15 a pair. Variable manufacturing cost is $6.50 a pair, and allocated fixed manufacturing cost is $2.50 a pair. It has enough idle capacity available to accept a one-time-only special order of 35,000 pairs of slippers at $9.00 a pair, Fluffy will not incur any marketing costs as a result of the special order. What would the effect on operating income be if the special order could be accepted without affecting normal sales: (a) S0, (b) $87,500 increase, (c) $227,500 increase, or (d) $315,000 increase? Show your calculations. 2. The Manchester Company manufactures Part No. 498 for use in its production line. The manufacturing cost per unit for 30,000 units of Part No. 498 is as follows: (Click to see the manufacturing cost per unit.) Read part 2's requirement. 1. The Fluffy Company manufactures slippers and sells them at $15 a pair. Variable manufacturing cost is $6.50 a pair, and allocated fixed manufacturing cost is $2.50 a pair. It has enough idle capacity available to accept a one-time-only special order of 35,000 pairs of slippers at $9.00 a pair. Fluffy will not incur any marketing costs as a result of the special order. What would the effect on operating income be if the special order could be accepted without affecting normal sales: (a) SO, (b) $87,500 increase, (c) $227,500 increase, or (d) $315,000 increase? Show your calculations. Begin by selecting the labels to calculate the effect on operating income and then enter in the supporting calculations. i Data Table 4 Direct materials S x units in special order Variable direct manufacturing labor 25 Variable manufacturing overhead 10 Effect on operating income 21 Fixed manufacturing overhead allocated What would the effect on operating income be if the special order could be accepted without affecting normal sales? $ 60 Total manufacturing cost per unit O A. $0 The Plate Company has offered to sell 30,000 units of Part No. 498 to Manchester OB $315,000 increase for $56 per unit. Manchester will make the decision to buy the part from Plate if OC. $227,500 increase there is an overall savings of at least $35,000 for Manchester. If Manchester accepts Plate's offer, $5 per unit of the fixed overhead allocated would be OD $87,500 increase eliminated. Furthermore, Manchester has determined that the released facilities could be used to save relevant costs in the manufacture of Part No. 575. 2. The Manchester Company manufactures Part No. 498 for use in its production line. The manufacturing cost per unit for 30,000 E: (Click to see the manufacturing cost per unit.) Print Done For Manchester to achieve an overall savings of $35,000, the amount of relevant costs that would have to be saved by using the re $120,000, (b) $395,000, (c) $65,000 or (d) $480,000? Show your calculations. What other factors might Manchester consider beforL - X Begin by selecting the labels to calculate the relevant costs that would have to be saved and then enter in the supporting calculations Data Table Cost to purchase Total relevant costs of making: (per unit) Direct materials $ 4 Variable direct manufacturing labor 25 Variable manufacturing overhead 10 Costs saved by not making 21 Fixed manufacturing overhead allocated * units in the offer $ 60 Total manufacturing cost per unit Total costs saved The Plate Company has offered to sell 30,000 units of Part No. 498 to Manchester Extra costs of purchasing outside for $56 per unit. Manchester will make the decision to buy the part from Plate if Minimum savings required there is an overall savings of at least $35,000 for Manchester. If Manchester accepts Plate's offer, $5 per unit of the fixed overhead allocated would be Necessary relevant costs to be saved eliminated. Furthermore, Manchester has determined that the released facilities could be used to save relevant costs in the manufacture of Part No. 575. For Manchester to achieve an overall savings of $35,000, the amount of relevant costs that would have to be saved by using the rele Print Done O A. $395,000 OB B. $65,000 OC. $120,000 OD $480,000