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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
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 35 S& A costs 15 Fixed costs: Manufacturing overhead S & A costs 15 Total financial accounting costs 170 45 Regular selling price $255 a. 33. 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? $110 b. $160 $170 d. $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? $64,000 increase in operating profits b. $10,000 increase in operating profits $10,000 decrease in operating profits d. $64,000 decrease in operating profits 34. a
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