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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 it shirts for $12.00 each. The company has enough excess capacity to make this order. A breakdown of the costs is as follows: Direct materials Direct labor Variable factory overhead Fixed factory overhead Total cost per unit $2.00 0.50 1.50 2.50 $6.50 Should Piper Rose Boutique accept the special order made by the college? Proposal to Sell Polo Shirts to College The order should be Line Item Description Differential revenue from accepting offer Differential variable costs of additional units. Differential income (loss) from accepting the offer $ Amount

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 it shirts for $12.00 each. The company has enough excess capacity to make this order. A breakdown of the costs is as follows: Direct materials Direct labor Variable factory overhead Fixed factory overhead Total cost per unit $2.00 0.50 1.50 2.50 $6.50 Should Piper Rose Boutique accept the special order made by the college? Proposal to Sell Polo Shirts to College The order should be Line Item Description Differential revenue from accepting offer Differential variable costs of additional units. Differential income (loss) from accepting the offer $ Amount

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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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: Direct materials Direct labor Variable factory overhead Fixed factory overhead Total cost per unit $2.00 0.50 1.50 2.50 $6.50 Should Piper Rose Boutique accept the special order made by the college? Proposal to Sell Polo Shirts to College The order should be Line Item Description Differential revenue from accepting offer Differential variable costs of additional units Differential income (loss) from accepting the offer $ Amount
Transcribed Image Text: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: Direct materials Direct labor Variable factory overhead Fixed factory overhead Total cost per unit $2.00 0.50 1.50 2.50 $6.50 Should Piper Rose Boutique accept the special order made by the college? Proposal to Sell Polo Shirts to College The order should be Line Item Description Differential revenue from accepting offer Differential variable costs of additional units Differential income (loss) from accepting the offer $ Amount
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