The Glass Division has been approached by the U.S. Army with a special order for
ID: 2457461 • Letter: T
Question
The Glass Division has been approached by the U.S. Army with a special order for 1,600 windows at $388. Assume the transfer price established in requirement 2-c ($231). above is being used.
What is the incremental contribution (loss) per window for Weathermaster Window Company as a whole if this special order is accepted?
From the perspective of Weathermaster Window Company as a whole, should the special order be accepted or rejected?
What is the incremental contribution (loss) per window for the Glass Division if this special order is accepted?
2.The Glass Division has been approached by the U.S. Army with a special order for 1,600 windows at $388. Assume the transfer price established in requirement 2-c ($231). above is being used.
Weathermaster Window Company manufactures windows for the home-building industry. The window frames are produced in the Frame Division. The frames are then transferred to the Glass Division, where the glass and hardware are installed. The company's best-selling product is a three-by-four-foot, doublepaned operable window. The Frame Division can also sell frames directly to custom home builders, who install the glass and hardware. The sales price for a frame is $220. The Glass Division sells its finished windows for $440. The markets for both frames and finished windows exhibit perfect competition. The standard cost of the window is detailed as follows: Frame Glass Division Division Direct materia 36 $ 66* Direct labor Variable overhead 66 48 36 Total $150 $ 168 Not including the transfer price for the frame.Explanation / Answer
The Glass Division has been approached by the U.S. Army with a special order for
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