3. Wilco Inc. manufacturers pocket protectors used in accounting firms around the world. Unit cost data (10,000 units produced) related to the production of each pocket protector is as follows: Direct Materials Direct Labor Variable MOH Fixed MOH Variable Admin Costs Fixed Admin Costs Total Relevant Manuf. Cost (Special Order) DM DL $2 $1.5 $1 $3 $1.5 Seminole Corp has approached Wilco with an offer for a special order of 1,000 units for which they are willing to pay $7 per unit. Wilco would not incur any additional fixed costs and variable administrative costs would be reduced by 33%. Should Wilco accept the order and what is the effect on Wilco's income if they accept it? Variable MOH Variable Admin Total $1 $10
3. Wilco Inc. manufacturers pocket protectors used in accounting firms around the world. Unit cost data (10,000 units produced) related to the production of each pocket protector is as follows: Direct Materials Direct Labor Variable MOH Fixed MOH Variable Admin Costs Fixed Admin Costs Total Relevant Manuf. Cost (Special Order) DM DL $2 $1.5 $1 $3 $1.5 Seminole Corp has approached Wilco with an offer for a special order of 1,000 units for which they are willing to pay $7 per unit. Wilco would not incur any additional fixed costs and variable administrative costs would be reduced by 33%. Should Wilco accept the order and what is the effect on Wilco's income if they accept it? Variable MOH Variable Admin Total $1 $10
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:3. Wilco Inc. manufacturers pocket protectors used in accounting firms around the world. Unit
cost data (10,000 units produced) related to the production of each pocket protector is as
follows:
Direct Materials
Direct Labor
Variable MOH
Fixed MOH
Variable Admin Costs
Fixed Admin Costs
Total
Relevant Manuf. Cost (Special Order)
DM
DL
$2
$1.5
$1
$3
Seminole Corp has approached Wilco with an offer for a special order. of 1,000 units for which
they are willing to pay $7 per unit. Wilco would not incur any additional fixed costs and variable
administrative costs would be reduced by 33%. Should Wilco accept the order and what is the
effect on Wilco's income if they accept it?
Variable MOH
Variable Admin
Total
$1.5
$1
$10
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