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 45

S & A costs 15

Total financial accounting costs 170

Regular selling price $255

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?

a. $110

b. $160

c. $170

d. $255

34. 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 Welchs Net Income if the 1,000 unit special order is accepted for $180 a unit?

a. $64,000 increase in operating profits

b. $10,000 increase in operating profits

c. $10,000 decrease in operating profits

d. $64,000 decrease in operating profits

35. When evaluating a make-or-buy decision, which of the following must NOT be considered?

a. Alternative uses of the production capacity

b. The original cost of the production equipment

c. The quality of the supplier's product

d. The reliability of the supplier's delivery schedule