Howe Tie Company manufactures ties. When 18,000 items are produced, the costs per unit are: Direct materials

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Howe Tie Company manufactures ties. When 18,000 items are produced, the costs per unit are:

Direct materials $0.60

Direct manufacturing labor 3.00

Variable manufacturing overhead 1.20

Fixed manufacturing overhead 1.60

Variable selling 0.80

Fixed selling 1.13

Total $8.33

The ties normally sell for $13 each. Howe Tie Company has received a special order for 2,000 ties at $6.00 per tie. Howe Tie Company has excess capacity.

- Should the order be accepted? Why?

Related Book For answer-question

Financial and Managerial Accounting

ISBN: 978-0538480895

11th Edition

Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren

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Posted Date: Jan 24, 2022 04:46 AM

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Howe Tie Company manufactures ties. When 18,000 items are produced, the costs per unit are: Direct materials

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A special order is considered only when there is an excess capa... View the full answer

Financial and Managerial Accounting

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