### Special Order AnalysisCranberry has received a special order for 120 units of its product at a special price of $1,800. The product normally sells for $2,300 and has the following manufacturing costs:| Cost Component | Per Unit ||---------------------------------|-----------|| Direct materials | $630 || Direct labor | $330 || Variable manufacturing overhead | $430 || Fixed manufacturing overhead | $530 || Total Unit cost | $1,920 |#### Analysis QuestionAssume that Cranberry has sufficient capacity to fulfill the order without harming normal production and sales. If Cranberry accepts the order, what effect will the order have on the company's short-term profit?#### Multiple Choice Options- $14,400 increase- $49,200 increaseThe decision requires evaluating the incremental cost and revenue of the special order against the fixed manufacturing overhead to determine the effect on short-term profits.

Variable cost means the cost which vary with the level of output where as fixed cost remain fixed…

Saved Canbery has received a specál order for 120 units of its product at a special price of $1,800. The product normally sells for $2,300 and has the 26 folowing marufacturing costs Per unit $ 630 Direct materials 330 Direct labor Variable manufacturing overhead Fized nanufacturing overhead 430 530 Unit cost $1,920 Assume that Cranbery has suffcient capacity to fil the order without harming normal production and sales. H Cranberry accepts the ordler, what efiect wil the order have on the company's short-term profit? Mutple Choice O S1400 Increase $49.200 increase

Saved Canbery has received a specál order for 120 units of its product at a special price of $1,800. The product normally sells for $2,300 and has the 26 folowing marufacturing costs Per unit $ 630 Direct materials 330 Direct labor Variable manufacturing overhead Fized nanufacturing overhead 430 530 Unit cost $1,920 Assume that Cranbery has suffcient capacity to fil the order without harming normal production and sales. H Cranberry accepts the ordler, what efiect wil the order have on the company's short-term profit? Mutple Choice O S1400 Increase $49.200 increase

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 Helix Company has been approached by a new customer to provide 1,500 units of its regular product at a special price of $7 per unit. The regular selling price of the product is $9 per unit. Helix is operating at 80% of its capacity of 11,500 units. Identify whether the following costs are relevant to Helix's decision as to whether to accept the order at the special selling price. No additional fixed manufacturing overhead will be incurred because of this order. The only additional selling expense on this order will be a $0.70 per unit shipping cost. There will be no additional administrative expenses because of this order. Calculate the operating income from the order. a. Selling price b. Direct materials cost c. Direct labor cost d. Variable manufacturing overhead e. Fixed manufacturing overhead f. Regular selling expenses g. Additional selling expenses h. Administrative expenses Revenue (cost) per unit $ 7.00 (1.00) (2.00) (1.80) (0.75) (1.30) (0.70) (0.80) Relevant Not Relevant…
Roger Corp.
A2
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