Dapper Dan produces a man's suit that sells for $200. Although the company's production capacity is 3,000 suits per year, only 2,500 suits are currently being produced and sold. At this level of production, the company incurs the following costs: Unit-level material cost per unit $80 Unit-level labor cost per unit $40 Unit-level overhead per unit $20 Batch-level set-up cost for each batch of 500units $1,200 Annual product-level cost $15,000 Allocate facility level costs $50,000 Easton Clothiers has offered to purchase 500 suits as a one-time special purchase at a price of $135. Required: a) Prepare a quantitative analysis, and calculate the additional income if the special order should accepted. Enter the amount of additional income or loss if the special order is accepted (Do not use a dollar sign).
Dapper Dan produces a man's suit that sells for $200. Although the company's production capacity is 3,000 suits per year, only 2,500 suits are currently being produced and sold. At this level of production, the company incurs the following costs:
Unit-level material cost per unit $80
Unit-level labor cost per unit $40
Unit-level
Batch-level set-up cost for each batch of 500units $1,200
Annual product-level cost $15,000
Allocate facility level costs $50,000
Easton Clothiers has offered to purchase 500 suits as a one-time special purchase at a price of $135.
Required:
a) Prepare a quantitative analysis, and calculate the additional income if the special order should accepted.
Enter the amount of additional income or loss if the special order is accepted (Do not use a dollar sign).
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