SERRES Data table 74 Direct materials $ Variable direct manufacturing labor 40 Variable manufacturing overhead 10 21 Fixed manufacturing overhead allocated $ Total manufacturing cost per unit The Remnant Company has offered to sell 10,000 units of Part No. 498 to Manchester for $71 per unit. Manchester will make the decision to buy the part from Remnant if there is an overall savings of at least $45,000 for Manchester. If Manchester accepts Remnant's offer, $11 per unit of the fixed overhead allocated would be eliminated. Furthermore, Manchester has determined that the released facilities could be used to save relevant costs in the manufacture of Part No. 575. 1. The Cozy Company manufactures slippers and sells them at $10 a pair. Variable manufacturing cost is $5.75 a pair, and allocated fixed manufacturing cost is $1.75 a pair. It has enough idle capacity available to accept a one-time-only special order of 25,000 pairs of slippers at $7.50 a pair. Cozy will not incur any marketi costs as a result of the special order. What would the effect on operating income be if the special order could be accepted without affecting normal sales: (a) S0, (b) 543,750 increase, (c) 5143,750 increase, or (d) $187,500 increase? Show your calculations. 2. The Manchester Company manufactures Part No. 498 for use in its production line. The manufacturing cost per unit for 10,000 units of Part No. 498 is as follows: 5 Click to see the manufacturing cost per unit.) Read part 2's requirement 1. The Cozy Company manufactures slippers and sells them at $10 a pair. Variable manufacturing cost is $5.75 a pair, and allocated fixed manufacturing cost is $1.75 a pair. It has enough idle capacity available to accept a one-time-only special order of 25,000 pairs of slippers at $7.50 a pair. Cozy will not incur any a marketing costs as a result of the special order. What would the effect on operating income be if the special order could be accepted without affecting normal sales: (a) $0, (b) $43,750 increase. (C) $143.750 increase, or (d) $187,500 increase? Show your calculations. Begin by selecting the labels to calculate the effect on operating income and then enter in the supporting calculations Requirement x units in special order Effect on operating income For Manchester to achieve an overall savings of $45,000, the amount of relevant costs that would have to be saved by using the released facilities in the manufacture of Part No. 575 would be which of the following: (a) $30,000, (b) $115,000. (C) S125,000 or (d) $100,000? Show your calculations. What other factors might Manchester consider before outsourcing to Remnant? What would the effect on operating income be if the special order could be accepted without affecting normal sales? O A. $0 O B. $187,500 increase O C. $143,750 increase Print Done OD. $43,750 increase 2. The Manchester Company manufactures Part No. 498 for use in its production line. The manufacturing cost per unit for 10,000 units of Part No. 498 is as follows: (Click to see the manufacturing cost per unit.) For Manchester to achieve an overall savings of $45,000, the amount of relevant costs that would have to be saved by using the released facilities in the manufacture of Part No. 575 would be which of the following: (a) $30,000, (b) $115,000, (c) $125,000 or (d) $100,000? Show your calculations. What other factors might Manchester consider before outsourcing to Remnant? Begin by selecting the labels to calculate the relevant costs that would have to be saved and then enter in the supporting calculations. Cost to purchase Total relevant costs of making: (per unit) Costs saved by not making x units in the offer Total costs saved Extra costs of purchasing outside Minimum savings required Necessary relevant costs to be saved For Manchester to achieve an overall savings of $45,000, the amount of relevant costs that would have to be saved by using the released facilities in the manufacture of Part No. 575 would be: O A. $115,000 OB. $30,000 O C. $125.000 OD. $100.000 What other factors might Manchester consider before outsourcing to Remnant? Manchester would want to be sure about Manchester would also want Remnant to Before outsourcing to Remnant, Manchester might consider To achieve all these goals, Manchester may want to