Problem 13-24 Effect of order quantity on special order decision LO 13-2

Walton Quilting Company makes blankets that it markets through a variety of department stores. It makes the blankets in batches of 2,500 units. Walton made 25,000 blankets during the prior accounting period. The cost of producing the blankets is summarized here.

Materials cost ($25 per unit 25,000)	$	625,000
Labor cost ($20 per unit 25,000)		500,000
Manufacturing supplies ($2 25,000)		50,000
Batch-level costs (10 batches at $5,000 per batch)		50,000
Product-level costs		310,000
Facility-level costs		380,000
Total costs	$	1,915,000
Cost per unit = $1,915,000 25,000 = $76.6

Required

1. Sunny Motels has offered to buy a batch of 1,000 blankets for $50 each. Waltons normal selling price is $92 per unit. Calculate the relevant cost per unit for the special order. Based on the preceding quantitative data, should Walton accept the special order?
2. Sunny offered to buy a batch of 2,500 blankets for $50 per unit, calculate the relevant cost per unit for the special order. Should Walton accept the special order?

(For all requirements, round "Cost per unit" to 2 decimal places.) a. Cost per unit Should Walton accept the special order? Cost per unit Should Walton accept the special order