Answer in text form please Exercise 11-22 (Static) Special Order; Opportunity Cost [LO 11-2)Grant Industries, a manufacturer of electronic parts, has recently received an invitation to bid on a special order for 20,000 units of oneof its most popular products. Grant currently manufactures 40,000 units of this product in its Loveland, Ohio, plant. The plant isoperating at 50% capacity. There will be no marketing costs on the special order. The sales manager of Grant wants to set the bid at$9 per unit because she is sure that Grant will get the business at that price. Others on the executive committee of the firm object,saying that Grant would lose money on the special order at that price.40,000$ 80,000120,000240,000$440,000$ 11UnitsManufacturing costs:Direct materialsDirect laborFactory overheadTotal manufacturing costsUnit cost60,000Required:2. What is the relevant cost per unit? What do you think the minimum short-term bid price per unit should be? What would be theimpact on short-term operating income if the order is accepted at the price recommended by the sales manager?$ 120,000180,000300,000$ 600,000$ 104. What would the total opportunity cost be if by accepting the special order the company lost sales of 5,000 units to its regularcustomers? Assume the preceding facts plus a normal selling price of $20 per unit.Complete this question by entering your answers in the tabs below.Required 2Required 4What is the relevant cost per unit? What do you think the minimum short-term bid price per unit should be? What would bethe impact on short-term operating income if the order is accepted at the price recommended by the sales manager?Relevant cost per unit

Cost accounting is one of useful branch of accounting. Relevant costs means those type and nature of…

Exercise 11-22 (Static) Special Order; Opportunity Cost [LO 11-2] Grant Industries, a manufacturer of electronic parts, has recently received an invitation to bid on a special order for 20,000 units of one of its most popular products. Grant currently manufactures 40,000 units of this product in its Loveland, Ohio, plant. The plant is operating at 50% capacity. There will be no marketing costs on the special order. The sales manager of Grant wants to set the bid at $9 per unit because she is sure that Grant will get the business at that price. Others on the executive committee of the firm object, saying that Grant would lose money on the special order at that price. 40,000 $ 80,000 120,000 240,000 $ 440,000 $ 11 Units Manufacturing costs: Direct materials Direct labor Factory overhead Total manufacturing costs Unit cost 60,000 $ 120,000 180,000 300,000 $ 600,000 $ 10 Required: 2. What is the relevant cost per unit? What do you think the minimum short-term bid price per unit should be? What would be the impact on short-term operating income if the order is accepted at the price recommended by the sales manager? 4. What would the total opportunity cost be if by accepting the special order the company lost sales of 5,000 units to its regular customers? Assume the preceding facts plus a normal selling price of $20 per unit. Required 2 Required 4 Complete this question by entering your answers in the tabs below.

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter14: Capital Structure Management In Practice

Section14.A: Breakeven Analysis

Problem 5P