15. Bethany Corporation recently received an offer for a special order. Bethany usually charges $47 per...

 

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15. Bethany Corporation recently received an offer for a special order. Bethany usually charges $47 per unit, and has the following per-unit costs: 10 15 Overhead costs include fixed overhead, which is applied to production at 40% of direct labor costs. Variable overhead is applied based on direct materials. The special order would bring in revenue of $50 per unit for 5,000 units. Bethany has the machine time available to fill the special order, but not the labor time; direct labor would have to work on the order during overtime, for which they are paid time-and-a- half. Bethany would need to purchase a special machine to make modifications to the customer's specifications; the machine costs $10,000, and Bethany would not be able to use it again. Determine whether it would be financially beneficial for Bethany to accept the special order, and calculate the net benefit. 15. Bethany Corporation recently received an offer for a special order. Bethany usually charges $47 per unit, and has the following per-unit costs: 10 15 Overhead costs include fixed overhead, which is applied to production at 40% of direct labor costs. Variable overhead is applied based on direct materials. The special order would bring in revenue of $50 per unit for 5,000 units. Bethany has the machine time available to fill the special order, but not the labor time; direct labor would have to work on the order during overtime, for which they are paid time-and-a- half. Bethany would need to purchase a special machine to make modifications to the customer's specifications; the machine costs $10,000, and Bethany would not be able to use it again. Determine whether it would be financially beneficial for Bethany to accept the special order, and calculate the net benefit.

Answer rating: 100% (QA)

Answer No it would not be financially beneficial for Bethany to accept the special order The net ben... View the full answer