Direct materials Direct labor Manufacturing overhead Unit product cost $ 148 88 38 5 274 A wedding party has approached Imperial Jewelers about buying 14 gold bracelets for the discounted price of $367.00 each. The wedding party would like special filigree applied to the bracelets that would increase the direct materials cost per bracelet by $8. imperial Jewelers would have to buy a special tool for $461 to apply the filigree to the bracelets. The special tool would have no other se once the special order is completed. To analyze this special order, Imperial Jewelers determined most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $9.00 of the overhead is variable with respect to the number of bracelets produced. The company also believes accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party's order using existing manufacturing capacity. Required: 1. What is the financial advantage (disadvantage) of accepting the wedding party's special order? 2. Should the company accept the special order?

Direct materials Direct labor Manufacturing overhead Unit product cost $ 148 88 38 5 274 A wedding party has approached Imperial Jewelers about buying 14 gold bracelets for the discounted price of $367.00 each. The wedding party would like special filigree applied to the bracelets that would increase the direct materials cost per bracelet by $8. imperial Jewelers would have to buy a special tool for $461 to apply the filigree to the bracelets. The special tool would have no other se once the special order is completed. To analyze this special order, Imperial Jewelers determined most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $9.00 of the overhead is variable with respect to the number of bracelets produced. The company also believes accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party's order using existing manufacturing capacity. Required: 1. What is the financial advantage (disadvantage) of accepting the wedding party's special order? 2. Should the company accept the special order?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 4EA: Use the information provided to create a standard cost card for production of one glove box switch....

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