Diamond Corporation produces baseball bats for kids that it sells for $37 each. At capacity, the...

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Diamond Corporation produces baseball bats for kids that it sells for $37 each. At capacity, the company can produce 54,000 bats a year. The costs of producing and selling 54,000 bats are as follows: Cost per Bat Total Costs S 756,000 Direct materials $14 Variable direct manufacturing labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses 4 216,000 108,000 270,000 108,000 2 3 162,000 S1,620,000 Total costs $30 Required: 1. Suppose Diamond is currently producing and selling 44,000 bats. At this level of production and sales, its fixed costs are the same as given in the preceding table. Home Run Corporation wants to place a one-time special order for 10,000 bats at $21 each. Diamond will incur no variable selling costs for this special order. Should Diamond accept this one-time special order? Show your calculations. 2. Now suppose Diamond is currently producing and selling 54,000 bats. If Diamond accepts Home Run's offer, it will have to sell 10,000 fewer bats to its regular customers. (a) On financial considerations alone, should Diamond accept this one-time special order? Show your calculations. Diamond Corporation produces baseball bats for kids that it sells for $37 each. At capacity, the company can produce 54,000 bats a year. The costs of producing and selling 54,000 bats are as follows: Cost per Bat Total Costs S 756,000 Direct materials $14 Variable direct manufacturing labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expenses Fixed selling expenses 4 216,000 108,000 270,000 108,000 2 3 162,000 S1,620,000 Total costs $30 Required: 1. Suppose Diamond is currently producing and selling 44,000 bats. At this level of production and sales, its fixed costs are the same as given in the preceding table. Home Run Corporation wants to place a one-time special order for 10,000 bats at $21 each. Diamond will incur no variable selling costs for this special order. Should Diamond accept this one-time special order? Show your calculations. 2. Now suppose Diamond is currently producing and selling 54,000 bats. If Diamond accepts Home Run's offer, it will have to sell 10,000 fewer bats to its regular customers. (a) On financial considerations alone, should Diamond accept this one-time special order? Show your calculations.

Answer rating: 100% (QA)

Answer 1 Statement of Incremental Profit If Special Order is Accepted 10000 Bats Incremental Income ... View the full answer