2 Exercise 11-4 (Algo) Special Order Decision [LO11-4] Imperial Jewelers manufactures and sells a gold bracelet for $408.00. The company's accounting system says that the unit product cost for this bracelet is $268.00 as shown below: Direct materials Direct labor Manufacturing overhead Unit product cost $ 145 89 34 $268 The members of a wedding party have approached Imperial Jewelers about buying 24 of these gold bracelets for the discounted price of $368.00 each. The members of the wedding party would like special filigree applied to the bracelets that would increase the direct materials cost per bracelet by $6. Imperial Jewelers would also have to buy a special tool for $469 to apply the filigree to the bracelets. The special tool would have no other use once the special order is completed. To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $7.00 of the overhead is variable with respect to the number of bracelets produced. The company also believes that 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 its existing manufacturing capacity Required: 1. What is the financial advantage (disadvantage) of accepting the special order from the wedding party? 2. Should the company accept the special order? Complete this question by entering your answers in the tabs below. Nepre what is the financial advantage (sadvantage) of accepting the special order from the wedding party?
2 Exercise 11-4 (Algo) Special Order Decision [LO11-4] Imperial Jewelers manufactures and sells a gold bracelet for $408.00. The company's accounting system says that the unit product cost for this bracelet is $268.00 as shown below: Direct materials Direct labor Manufacturing overhead Unit product cost $ 145 89 34 $268 The members of a wedding party have approached Imperial Jewelers about buying 24 of these gold bracelets for the discounted price of $368.00 each. The members of the wedding party would like special filigree applied to the bracelets that would increase the direct materials cost per bracelet by $6. Imperial Jewelers would also have to buy a special tool for $469 to apply the filigree to the bracelets. The special tool would have no other use once the special order is completed. To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $7.00 of the overhead is variable with respect to the number of bracelets produced. The company also believes that 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 its existing manufacturing capacity Required: 1. What is the financial advantage (disadvantage) of accepting the special order from the wedding party? 2. Should the company accept the special order? Complete this question by entering your answers in the tabs below. Nepre what is the financial advantage (sadvantage) of accepting the special order from the wedding party?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
Related questions
Question
![2
Exercise 11-4 (Algo) Special Order Decision [LO11-4]
Imperial Jewelers manufactures and sells a gold bracelet for $408.00. The company's accounting system says that the unit product
cost for this bracelet is $268.00 as shown below.
Direct materials
Direct labor
Manufacturing overhead
Unit product cost
$ 145
89
34
$268
The members of a wedding party have approached Imperial Jewelers about buying 24 of these gold bracelets for the discounted price
of $368.00 each. The members of the wedding party would like special filigree applied to the bracelets that would increase the direct
materials cost per bracelet by $6. Imperial Jewelers would also have to buy a special tool for $469 to apply the filigree to the
bracelets. The special tool would have no other use once the special order is completed.
To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and
unaffected by variations in how much jewelry is produced in any given period. However, $7.00 of the overhead is variable with respect
to the number of bracelets produced. The company also believes that 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 its existing
manufacturing capacity
Required:
1. What is the financial advantage (disadvantage) of accepting the special order from the wedding party?
2. Should the company accept the special order?
Complete this question by entering your answers in the tabs below.
what is the financial advantage (disadvantage) of accepting the special order from the wedding party?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb59d7882-5e1a-4e96-8617-c38e97c9150c%2F30a6ca11-bdf4-4318-a44d-8bca07962759%2F97rn17_processed.jpeg&w=3840&q=75)
Transcribed Image Text:2
Exercise 11-4 (Algo) Special Order Decision [LO11-4]
Imperial Jewelers manufactures and sells a gold bracelet for $408.00. The company's accounting system says that the unit product
cost for this bracelet is $268.00 as shown below.
Direct materials
Direct labor
Manufacturing overhead
Unit product cost
$ 145
89
34
$268
The members of a wedding party have approached Imperial Jewelers about buying 24 of these gold bracelets for the discounted price
of $368.00 each. The members of the wedding party would like special filigree applied to the bracelets that would increase the direct
materials cost per bracelet by $6. Imperial Jewelers would also have to buy a special tool for $469 to apply the filigree to the
bracelets. The special tool would have no other use once the special order is completed.
To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and
unaffected by variations in how much jewelry is produced in any given period. However, $7.00 of the overhead is variable with respect
to the number of bracelets produced. The company also believes that 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 its existing
manufacturing capacity
Required:
1. What is the financial advantage (disadvantage) of accepting the special order from the wedding party?
2. Should the company accept the special order?
Complete this question by entering your answers in the tabs below.
what is the financial advantage (disadvantage) of accepting the special order from the wedding party?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.