Welch Manufacturing Company is approached by a European customer to fulfill a one-time-only special order for...

Transcribed Image Text:

Welch Manufacturing Company is approached by a European customer to fulfill a one-time-only special order for 1,000 units a product similar to one offered to domestic customers. Welch Manufacturing Company has excess capacity. The following per unit data apply for sales to regular customers: Variable costs: Direct materials $40 Direct labor 20 Manufacturing overhead S & A costs 15 Fixed costs: Manufacturing overhead S & A costs 15 35 45 33. Total financial accounting costs 170 Regular selling price $255 For Welch Manufacturing Company, what is the minimum acceptable price of this 1,000 unit special order in order for Welch to earn at least $50,000 on the special order? a. b. $110 $160 C. 34. d. $170 $255 If a stamping machine at a cost of $6,000 has to be purchased by Welch for the special order, what is the effect on Welch's Net Income if the 1,000 unit special order is accepted for $180 a unit? a. b. C. $64,000 increase in operating profits $10,000 increase in operating profits $10,000 decrease in operating profits d. $64,000 decrease in operating profits Welch Manufacturing Company is approached by a European customer to fulfill a one-time-only special order for 1,000 units a product similar to one offered to domestic customers. Welch Manufacturing Company has excess capacity. The following per unit data apply for sales to regular customers: Variable costs: Direct materials $40 Direct labor 20 Manufacturing overhead S & A costs 15 Fixed costs: Manufacturing overhead S & A costs 15 35 45 33. Total financial accounting costs 170 Regular selling price $255 For Welch Manufacturing Company, what is the minimum acceptable price of this 1,000 unit special order in order for Welch to earn at least $50,000 on the special order? a. b. $110 $160 C. 34. d. $170 $255 If a stamping machine at a cost of $6,000 has to be purchased by Welch for the special order, what is the effect on Welch's Net Income if the 1,000 unit special order is accepted for $180 a unit? a. b. C. $64,000 increase in operating profits $10,000 increase in operating profits $10,000 decrease in operating profits d. $64,000 decrease in operating profits