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Direct Materials Direct labor A customer has requested that Lewelling Corporation fill a special order for 2,700 units of product X-47 for $33 a unit. Product X-47's normal unit product cost is $18.40, broken down as follows: Variable manufacturing overhead Fixed manufacturing overhead Unit Product cost $37,810 advantage 3 $16,700 disadvantage 17.300 5.10 4.00 2.20 7.10 18.40 ▼ 19 Assume that direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product X-47 that would increase the variable costs by $1.40 per unit and that would require an investment of $17,000 in special molds that would have salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. What would be th financial advantage (disadvantage) for the company as a result of accepting this special order?

Direct Materials Direct labor A customer has requested that Lewelling Corporation fill a special order for 2,700 units of product X-47 for $33 a unit. Product X-47's normal unit product cost is $18.40, broken down as follows: Variable manufacturing overhead Fixed manufacturing overhead Unit Product cost $37,810 advantage 3 $16,700 disadvantage 17.300 5.10 4.00 2.20 7.10 18.40 ▼ 19 Assume that direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product X-47 that would increase the variable costs by $1.40 per unit and that would require an investment of $17,000 in special molds that would have salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. What would be th financial advantage (disadvantage) for the company as a result of accepting this special order?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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6 Direct Materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit Product cost A customer has requested that Lewelling Corporation fill a special order for 2,700 units of product X-47 for $33 a unit. Product X-47's normal unit product cost is $18.40, broken down as follows: A $37,810 advantage B $16,700 disadvantage C $17,200 advantage D $2,500 disadvantage 5.10 4.00 2.20 7.10 18.40 Assume that direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product X-47 that would increase the variable costs by $1.40 per unit and that would require an investment of $17,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. What would be the financial advantage (disadvantage) for the company as a result of accepting this special order? 5.10 5.40 2.20 7.10 19.80
Transcribed Image Text:6 Direct Materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Unit Product cost A customer has requested that Lewelling Corporation fill a special order for 2,700 units of product X-47 for $33 a unit. Product X-47's normal unit product cost is $18.40, broken down as follows: A $37,810 advantage B $16,700 disadvantage C $17,200 advantage D $2,500 disadvantage 5.10 4.00 2.20 7.10 18.40 Assume that direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product X-47 that would increase the variable costs by $1.40 per unit and that would require an investment of $17,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. What would be the financial advantage (disadvantage) for the company as a result of accepting this special order? 5.10 5.40 2.20 7.10 19.80
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