Course Contents > LON-CAPA PROBLEMS ... PROBLEMS SPECIAL ORDER DECISION Notes tala Wham Products, a maker of specialty products, is currently manufacturing and selling a product called Gory Goo. A discount department store, J-Mart, has made a one-time offer to purchase 56.000 units at Gory Goow 14.75 per unit for sale in 3-Mart stores. The name and packaging for these 56,000 units will be changed so as not to appear to be the same as Gory Goo. Since Wher has enough excess capoty management would naturally like to produce and sell the additional units. But there is concern that 14.75 is below Gory Goo's unit manufacutring costs and well below it's normal selling price, which set at se above unit manufacturing costs Last year, Gory God's unit sales were 380,000 and is total manufacturing costs were Direct material Direct labor Variable overhead Poved Overhead Total manufacturing $410,000 22.000 342,000 1,350,000 $2,318,000 In addition to the manufacturing costs, there were selling and ministrative expenses associated with Cary Geo Vrable thing and intrative expenses were $1.50 per unit, and administrative expenses were $190,000 For the special order, unit variable manufacturing costs are expected to be the same as they were a year and fored manufacturing costs were expected to increased and administrative homo expected to increase, but because the social order units are being sold drey to the Martean, arabe selling and administrat expenses are expected to be 0.30 per un Even though the special units will lave different name and packaging Wham's magroup will believes trimately 200 from the scale wote when normally purchase Gory Goo from Wham. The group also believes that Mart has no other are for the Gary Gos product REQUIRED When the offer from what the effect on tiempre! In The 4/6 Timer Course ContesLON-CAM PROBLEMS -- PROBLEMS SPECIAL ORDER DECISION... Notes Evaluate Feedback When Products, a maker of specialy products, is currently manufacturing and selling product called Gary Goo. A discount department store, Mart, has made a one-time offer to purchase 56,000 units of Gory Goo$4.75 per unit for sale in S. Martstores. The name and packaging for these 56,000 units will be changed so not to appear to be the same as Gory Goo. Since Wham has enough excess capacity management would naturally like to produce and sell the additional units. But there is concern that $4.75 is below Gory Goo's unit manufacutring costs and well below it's normal selling price, which is set at som above unit manufacturing costs Last year, Gory Goo's uit sales were 180,000 and is total manufacturing costs were Direct material Director Variable overhead ed Overhead Total manufacturing $410,000 228.000 342,000 1,330,000 $2,318,000 into the manding com, www cated with Gary Gio Varg and distrative expenses were $1.50 per tand vedeling and 1. te worden gestes they were you and manufacturing costs are not spected to increased in and admitive expenses are Hathawaning and drives are expected to be only $0.90 per new whom we that my 7,000 units from the social order will be to customers who would om the warm. The start the suror for the Gry prout