Piper Rose Boutique has been approached by the community college to make special polo shirts for the faculty and staff. The college is willing to buy 4,000 polos with its own design for $6.00 each. The company normally sells its shirts for $12.00 each. The company has enough excess capacity to make this order. A breakdown of the costs is as follows: Line Item Description Costs Direct materials $2.00 Direct labor 0.50 Variable factory overhead 1.50 Fixed factory overhead 2.50 Total cost per unit $6.50 Should Piper Rose Boutique accept the special order made by the college? Question Content Area blankProposal to Sell Polo Shirts to Collegeblank Line Item Description Amount Differential revenue from accepting offer $Differential revenue from accepting offer Differential variable costs of additional units Differential variable costs of additional units Differential income (loss) from accepting the offer $Differential income (loss) from accepting the offer
Piper Rose Boutique has been approached by the community college to make special polo shirts for the faculty and staff. The college is willing to buy 4,000 polos with its own design for $6.00 each. The company normally sells its shirts for $12.00 each. The company has enough excess capacity to make this order. A breakdown of the costs is as follows: Line Item Description Costs Direct materials $2.00 Direct labor 0.50 Variable factory overhead 1.50 Fixed factory overhead 2.50 Total cost per unit $6.50 Should Piper Rose Boutique accept the special order made by the college? Question Content Area blankProposal to Sell Polo Shirts to Collegeblank Line Item Description Amount Differential revenue from accepting offer $Differential revenue from accepting offer Differential variable costs of additional units Differential variable costs of additional units Differential income (loss) from accepting the offer $Differential income (loss) from accepting the offer
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Piper Rose Boutique has been approached by the community college to make special polo shirts for the faculty and staff. The college is willing to buy 4,000 polos with its own design for $6.00 each. The company normally sells its shirts for $12.00 each. The company has enough excess capacity to make this order. A breakdown of the costs is as follows:
| Line Item Description | Costs |
|---|---|
| Direct materials | $2.00 |
| Direct labor | 0.50 |
| Variable factory |
1.50 |
| Fixed factory overhead | 2.50 |
| Total cost per unit | $6.50 |
Should Piper Rose Boutique accept the special order made by the college?
Question Content Area
| Line Item Description | Amount |
|---|---|
| Differential revenue from accepting offer | $Differential revenue from accepting offer |
| Differential variable costs of additional units | Differential variable costs of additional units |
| Differential income (loss) from accepting the offer | $Differential income (loss) from accepting the offer |
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