Imperial Jewelers manufactures and sells a gold bracelet for $409.00. The company's accounting system says that...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Imperial Jewelers manufactures and sells a gold bracelet for $409.00. The company's accounting system says that the unit product cost for this bracelet is $262.00 as shown below: Direct materials Direct labor Manufacturing overhead Unit product cost $ 141 90 31 $ 262 The members of a wedding party have approached Imperial Jewelers about buying 16 of these gold bracelets for the discounted price of $369.00 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 $6. Imperial Jewelers would also have to buy a special tool for $462 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, $7.00 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. 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) of accepting the special order from the wedding party? < Required 1 Required 2 > Imperial Jewelers manufactures and sells a gold bracelet for $409.00. The company's accounting system says that the unit product cost for this bracelet is $262.00 as shown below: Direct materials Direct labor Manufacturing overhead Unit product cost $ 141 90 31 $ 262 The members of a wedding party have approached Imperial Jewelers about buying 16 of these gold bracelets for the discounted price of $369.00 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 $6. Imperial Jewelers would also have to buy a special tool for $462 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, $7.00 of the overhead is variable with respect to the number of bracelets produced. The company also believes that accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party's order using its existing manufacturing capacity. Required: 1. What is the financial advantage (disadvantage) of accepting the special order from the wedding party? 2. Should the company accept the special order? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) of accepting the special order from the wedding party? < Required 1 Required 2 >
Expert Answer:
Related Book For
Managerial Accounting
ISBN: 978-1259307416
16th edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
Students also viewed these accounting questions
-
What is the name used to describe a resident of Spain who travels to Andorra to purchase clothing there, in order to take advantage of the lower VAT, and then returns home the same day? a. a tourist....
-
Macroware Corporation reported the following information in its financial statements for three successive quarters ($ in millions): Three Months Ended 6/30/2020 (04) 3/31/2020 (03) 12/31/2019 (02)...
-
Access: The U.S. Supreme Court opinion inBurwell v. Hobby Lobbyat: Links to an external site.https://www.supremecourt.gov/opinions/13pdf/13-354_olp1.pdf Links to an external site. Links to an...
-
The following data are from the accounting records of Niles Castings for year 2: Units produced and sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,000 Total revenues and costs Sales...
-
Canadian car drivers are often disgruntled when gasoline prices change. It seems that whether the price goes up or down, every gas station in town adjusts its price at the same time. Is this an...
-
Blocking the entry of other firms and/or substitute goods is essential for maintaining a monopoly. What are some of the business strategies used to do this blocking?
-
MRI Co. has one employee, and the company is subject to the following taxes: Compute MRIs amounts for each of these four taxes as applied to the employees gross earnings for September under each of...
-
You are a loan officer for White Sands Bank of Taos. Paul Jason, president of P. Jason Corporation, has just left your office. He is interested in an 8-year loan to expand the company's operations....
-
Which of the following is most likely to be true? a. None of the above. b. An incoming CEO would prefer to manage earnings downward in their first year. c. An incoming CEO following a forced...
-
On June 3, 2019, Majestic Ca soped all of the common stock of Golden Company, which became a divisi of MC Gulp of f Golden Company Statement of Financial Position A Equity and Liabilities Plant...
-
Silver Titan's company has projected sales for the first seven months of 2021 are given below: Month January February March April May June July Amount $250,000 $340,000 $280,000 $300,000 $350,000...
-
Marcus purchased a diamond ring for $15,000 10 years ago. It was stolen in March this year. The ring was purchased to celebrate achieving a significant promotion at work. The FMV at the time of the...
-
Stan Rockford has the following passive activity items: Current-year passive income and loss amounts: $10,000 CHI ($7,000) JKL ($8,000) RST. What is the net income reported this year for the private...
-
On June 1st, Stiedemann entered into a contract to build a barn for Schaden : Base fee is $13,000 15% bonus for finishing 2 weeks early 5% bonus for finishing a week early Probability of finishing 2...
-
Amazon Tires produces custom tires. The company's average cost per tire is $160.00 when it produces 2,000 tires per month. If $120,000 of the total cost is fixed, What is the variable cost of...
-
ITN 100 ASSIGNMENT 4 STUDENT NAME : CYBERSECURITY FOR "SMART-TOYS-SMART KIDS" Smart-Toys-Smart Kids is a toy manufacturing company with their own retail stores. They have been manufacturing and...
-
Fill in each blank so that the resulting statement is true. 83 + 103 = ______ .
-
What is the drawback of company rankings based on EVA?
-
If EPS rises after a deal, does this necessarily imply value creation?
-
Can value be created by developing new products and new markets or by reducing costs?
Study smarter with the SolutionInn App