Question: Hi please help with this problem, notes on how to solve would be helpful! Imperial Jewelers manufactures and sells a gold bracelet for $402.00. The
Hi please help with this problem, notes on how to solve would be helpful!
Imperial Jewelers manufactures and sells a gold bracelet for $402.00. The companys accounting system says that the unit product cost for this bracelet is $270.00 as shown below:
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Thank you!
Direct materials. Direct labor Manufacturing overhead Unit product cost The members of a wedding party have approached Imperial Jewelers about buying 25 of these gold bracelets for the discounted price of $362.00 each. The members of the wedding party would like special filigree applied to the bracelets that would increase the direct materials cost per bracelet by $11. Imperial Jewelers would also have to buy a special tool for $450 to apply the filigree to the bracelets. The special tool would have no other use once the special order is completed. To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $12.00 of the overhead is variable with respect to the number of bracelets produced. The company also believes that accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party's order using its existing manufacturing capacity. $147 90 33 $ 270 Required: 1. What is the financial advantage (disadvantage) of accepting the special order from the wedding party? 2. Should the company accept the special order? Required 1 Complete this question by entering your answers in the tabs below. Required 2 > Answer is complete but not entirely correct. What is the financial advantage (disadvantage) of accepting the special order from the wedding party? Financial advantage $ 2,125
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