Main Menu Contents Grades Chat Course Contents LON-CAPA PROBLEMS PROBLEMS SPECIAL ORDER DECISION... wham Products, a maker of specialty products, is currently manufacturing and selling a product caled Gory Cos. A discount department store, 3-Hart, has made a one-time offer to purchase 63,000 of Gery Goo at $5.00 per unit for sale in 3-Mart stores. Since wham has enough excess capacity, management would naturally the to produce and sell the additional units. But there is concern that $5.00 Gary Goo's unit manufacutring costs and well below it's normal $9.35 selling price Last year, Gery Goo's unt sales were 420,000 and its total manufacturing costs were Direct material Direct labor Variable overheat Fond Overhead Total manufacturing $462,000 253,000 378,000 1,470,000 $2,562,000 In addition to the manufacturing costs, there were selling and administrative expenses associated with Gary Goo. Variable selling and administrative expenses were $1.50 per unit, and fixed selling and administrative expenses were $210,000 For the special under, variable manufacturing costs per unit are expected to be the same as they were last year, but because the special order units are being sold directly to the 3-Mart chain, variable selling and administrative expenses are expected to be only $1.00 per unit. All feed costs are not expected to change Even though the special order units will have a different name and packaging, Wham's marketing group still believes that approximately 5,000 units from the special order will be sold to customers who w normally purchese Gory Goo from Wham REQUIRED Wham accepts the offer from 3-Mart, what will be the effect on firm profits? Suber Tries 0/6