Imperial Jewelers is considering a special order for 13 handcrafted gold bracele

Question

Imperial Jewelers is considering a special order for 13 handcrafted gold bracelets to be given as gifts to members of a wedding party. The normal selling price of a gold bracelet is $406.00 and its unit product cost is $268.00 as shown below Direct materials Direct labor Manufacturing overhead $144 89 35 Unit product cost $268 Most of the manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $9 of the overhead is variable with respect to the number of bracelets produced. The customer who is interested in the special bracelet order would like special filigree applied to the bracelets. This filigree would require additional materials costing $8 per bracelet and would also require acquisition of a special tool costing $468 that would have no other use once the special order is completed This order would have no effect on the company's regular sales and the order could be fulfilled using the company's existing capacity without affecting any other order. Required 1. What effect would accepting this order have on the company's net operating income if a special price of $366.00 per bracelet is offered for this order? (Enter all amounts as positive values.) Per Total 13 Unit Bracelets Incremental revenue Incremental costs Variable costs Direct materials Direct labor Variable manufacturing overhead Special filigree Total variable cost Fixed costs Purchase of special tool Total incremental cost Incremental net operating income (loss) 2. Should the special order be accepted at this price? O Yes 0

Explanation / Answer

1.the following is the required table:

2.YES.

Since we have an incrementa net income of $1,040, special order shall be accepted.

Per Unit Total 13 Bracelets Incremental revenue $366 $4,758 Incremental costs: Variable costs Diirect materials $144 $1,872 Direct labour $89 $1,157 variable manufacturing overhead $9 $117 Special figree $8 $104 Total variable cost $250 $3,250 Fixec costs Purchase of special tool $468 Total incremental cost incremental net operating income (loss) $1,040

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.