The Edmonton Chair Company is approached by an Asian customer to fill a one-time-only special order...

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The Edmonton Chair Company is approached by an Asian customer to fill a one-time-only special order for a product similar to one offered to domestic customers. The following per unit data apply for sales to regular customers: The customer wants 15,000 units in the special order. Based on actual sales of 90,000 units $ $ $ Direct materials Direct labour Variable manufacturing support Fixed manufacturing support* $ Total manufacturing costs $ $ Markup (50%) Normal selling price $ 40 15 20 41 116 58 174 The company normally incurs a $10 sales commission on all sales. Fixed selling costs are $100,000. *Axle and Wheel Manufacturing fixed costs per units is based on production of 100,000 units. Axle and Wheel Manufacturing has excess capacity of 10,000 units. Fixed manufacturing costs are 40% depreciation and 60% allocated costs of service departments. The customer has offered a price of $120.00 per unit for the special order. The company would only pay $5 of sales commission on the special order. Is the direct material costs a relevant cost to the special order? [YES, NO, PARTLY] Is the direct labour costs a relevant cost to the special order? [YES, NO, PARTLY] Is the variable manufacturing costs a relevant cost to the special order? [YES, NO, PARTLY] Is the fixed manufacturing costs a relevant cost to the special order? [YES, NO, PARTLY] Is the variable selling costs a relevant cost to the special order? [YES, NO, PARTLY] Is the fixed selling costs a relevant cost to the special order? [YES, NO, PARTLY] What is the total operating income generated from the special order? [Ignoring opportunity costs.] What is the opportunity costs of the special order? Put the answer as a negative number. EXAMPLE $(50,000) Choose... Choose... Choose... 0 Choose... Choose... Choose.... = Ch ● 0 Choose... # The Edmonton Chair Company is approached by an Asian customer to fill a one-time-only special order for a product similar to one offered to domestic customers. The following per unit data apply for sales to regular customers: The customer wants 15,000 units in the special order. Based on actual sales of 90,000 units $ $ $ Direct materials Direct labour Variable manufacturing support Fixed manufacturing support* $ Total manufacturing costs $ $ Markup (50%) Normal selling price $ 40 15 20 41 116 58 174 The company normally incurs a $10 sales commission on all sales. Fixed selling costs are $100,000. *Axle and Wheel Manufacturing fixed costs per units is based on production of 100,000 units. Axle and Wheel Manufacturing has excess capacity of 10,000 units. Fixed manufacturing costs are 40% depreciation and 60% allocated costs of service departments. The customer has offered a price of $120.00 per unit for the special order. The company would only pay $5 of sales commission on the special order. Is the direct material costs a relevant cost to the special order? [YES, NO, PARTLY] Is the direct labour costs a relevant cost to the special order? [YES, NO, PARTLY] Is the variable manufacturing costs a relevant cost to the special order? [YES, NO, PARTLY] Is the fixed manufacturing costs a relevant cost to the special order? [YES, NO, PARTLY] Is the variable selling costs a relevant cost to the special order? [YES, NO, PARTLY] Is the fixed selling costs a relevant cost to the special order? [YES, NO, PARTLY] What is the total operating income generated from the special order? [Ignoring opportunity costs.] What is the opportunity costs of the special order? Put the answer as a negative number. EXAMPLE $(50,000) Choose... Choose... Choose... 0 Choose... Choose... Choose.... = Ch ● 0 Choose... #