11 Saved Hel Since 1975, Omega Corporation has produced high quality watches for men and women....

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11 Saved Hel Since 1975, Omega Corporation has produced high quality watches for men and women. Currently, Omega sells a silver watch for $405.00. The unit product cost for this silver watch is $280.00 as shown below: Direct naterials $150 90 Direct labor Manufacturing overhead 40 Unit product cont $280 Alpha Company has approached Omega about buying 18 silver watches for the discounted price of $365.00 each. Alpha Company would like a special watch strap applied to the watches that would require Omega to buy a special tool for $456 and that would increase the direct materials cost per watch by $12. The special tool would have no other use once the special order is completed. To analyze this special order opportunity, Omega Corporation has determined that most of its manufacturing overhead is fixed and unaffected by variations in how many watches are produced in any given period. However, $13.00 of the overhead is variable with respect to the number of watches produced. The company also believes that accepting this order would have no effect on its ability to produce and sell watches to other customers. Furthermore, the company could fulfill the special order using its existing manufacturing capacity. Required: 1. What is the financial advantage (disadvantage) of accepting the special order from Alpha Company? 2. Should the company accept the special order? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) of accepting the special order from Aipha Company? < Prev 4 of 5 Next> 11 Saved Hel Since 1975, Omega Corporation has produced high quality watches for men and women. Currently, Omega sells a silver watch for $405.00. The unit product cost for this silver watch is $280.00 as shown below: Direct naterials $150 90 Direct labor Manufacturing overhead 40 Unit product cont $280 Alpha Company has approached Omega about buying 18 silver watches for the discounted price of $365.00 each. Alpha Company would like a special watch strap applied to the watches that would require Omega to buy a special tool for $456 and that would increase the direct materials cost per watch by $12. The special tool would have no other use once the special order is completed. To analyze this special order opportunity, Omega Corporation has determined that most of its manufacturing overhead is fixed and unaffected by variations in how many watches are produced in any given period. However, $13.00 of the overhead is variable with respect to the number of watches produced. The company also believes that accepting this order would have no effect on its ability to produce and sell watches to other customers. Furthermore, the company could fulfill the special order using its existing manufacturing capacity. Required: 1. What is the financial advantage (disadvantage) of accepting the special order from Alpha Company? 2. Should the company accept the special order? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) of accepting the special order from Aipha Company? < Prev 4 of 5 Next>

Answer rating: 100% (QA)

Req1 Special order analysis Rejecting Accepting special order special order Differential Sale... View the full answer