Since 1975, Omega Corporation has produced high quality watches for men and women. Currently, Omega sells...
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Since 1975, Omega Corporation has produced high quality watches for men and women. Currently, Omega sells a silver watch for $402.00. The unit product cost for this silver watch is $263.00 as shown below oirect materiels Direct labor Manufacturing overhead Undt product cost $141 86 36 $263 Alpha Company has approached Omega about buying 19 silver watches for the discounted price of $362.00 each. Alpha Company would lke a special watch strap applied to the watches that would require Omega to buy a special tool for $457 and that would increase the direct materials cost per watch by $6. The special tool would have no other use once the special order is completed. To analyze this special order opportunity, Ormega Corporation has determined that most of its manufacturing overhead is fixed and unattected by variations in how many watches are produced in any given period. However, $700 of the overhead is variable with tespect to the number of watches produced. The company also believes that accepting this order would have no etfect on its ability to produce and sell watches to other customers. Furthermore, the company could fulfill the special order using its existing manufacturing copacity Required: What is the financial advantage (disadvantage) of accepting the special order from Alpha Company 2. Should the company accept the special order? Complete this question by entering your answers in the tabs below. Reauired 1 Required 2 what is the finandial advantage (disadvantage) of accepting the special order from Alpha Company? Required 2 > Complete this question by entering your answers in Required 1 Required 2 Should the company accept the special order? OYes ONo < Required 1 Since 1975, Omega Corporation has produced high quality watches for men and women. Currently, Omega sells a silver watch for $402.00. The unit product cost for this silver watch is $263.00 as shown below oirect materiels Direct labor Manufacturing overhead Undt product cost $141 86 36 $263 Alpha Company has approached Omega about buying 19 silver watches for the discounted price of $362.00 each. Alpha Company would lke a special watch strap applied to the watches that would require Omega to buy a special tool for $457 and that would increase the direct materials cost per watch by $6. The special tool would have no other use once the special order is completed. To analyze this special order opportunity, Ormega Corporation has determined that most of its manufacturing overhead is fixed and unattected by variations in how many watches are produced in any given period. However, $700 of the overhead is variable with tespect to the number of watches produced. The company also believes that accepting this order would have no etfect on its ability to produce and sell watches to other customers. Furthermore, the company could fulfill the special order using its existing manufacturing copacity Required: What is the financial advantage (disadvantage) of accepting the special order from Alpha Company 2. Should the company accept the special order? Complete this question by entering your answers in the tabs below. Reauired 1 Required 2 what is the finandial advantage (disadvantage) of accepting the special order from Alpha Company? Required 2 > Complete this question by entering your answers in Required 1 Required 2 Should the company accept the special order? OYes ONo < Required 1
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Direct material 1416 14700 Direct labor 8600 Variable ma... View the full answer
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