Rooney Company manufactures a personal computer designed for use in schools and markets it under its...
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Rooney Company manufactures a personal computer designed for use in schools and markets it under its own label. Rooney has the capacity to produce 35,000 units a year but is currently producing and selling only 12,000 units a year. The computer's normal selling price is $1,680 per unit with no volume discounts. The unit-level costs of the computer's production are $570 for direct materials, $270 for direct labor, and $110 for indirect unit-level manufacturing costs. The total product- and facility-level costs incurred by Rooney during the year are expected to be $2,260,000 and $808,000, respectively. Assume that Rooney receives a special order to produce and sell 3,140 computers at $1,290 each. Required Calculate the contribution to profit from the special order. Should Rooney accept or reject the special order? Contribution to profit Should Rooney accept or reject the special order? Rooney Company manufactures a personal computer designed for use in schools and markets it under its own label. Rooney has the capacity to produce 35,000 units a year but is currently producing and selling only 12,000 units a year. The computer's normal selling price is $1,680 per unit with no volume discounts. The unit-level costs of the computer's production are $570 for direct materials, $270 for direct labor, and $110 for indirect unit-level manufacturing costs. The total product- and facility-level costs incurred by Rooney during the year are expected to be $2,260,000 and $808,000, respectively. Assume that Rooney receives a special order to produce and sell 3,140 computers at $1,290 each. Required Calculate the contribution to profit from the special order. Should Rooney accept or reject the special order? Contribution to profit Should Rooney accept or reject the special order?
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