Splish World manufactures a workout product, CardioBands, that helps users raise their heartbeats without exerting too much effort. The per-unit costs to manufacture and sell this rubber-band-based product are as follows. DM DL Variable-MOH Fixed-MOH Variable SG&A Fixed SG&A Total $1.10 0.75 0.30 1.55 0.25 0.95 $4.90 Splish World normally sells its CardioBands for $15 each. Jerry's Gym wants to purchase 50 of these workout products to incorporate in two of its cardio classes, but it wants a special price of $220 for the complete order. Splish World has enough production capacity to take on this special order.
Splish World manufactures a workout product, CardioBands, that helps users raise their heartbeats without exerting too much effort. The per-unit costs to manufacture and sell this rubber-band-based product are as follows. DM DL Variable-MOH Fixed-MOH Variable SG&A Fixed SG&A Total $1.10 0.75 0.30 1.55 0.25 0.95 $4.90 Splish World normally sells its CardioBands for $15 each. Jerry's Gym wants to purchase 50 of these workout products to incorporate in two of its cardio classes, but it wants a special price of $220 for the complete order. Splish World has enough production capacity to take on this special order.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:(a)
Should Splish World accept this special order, assuming all relevant costs will be incurred for the order?
How much profit or loss would this deal generate for Splish World? (Round answer to 2 decimal places, e.g. 15.25.)
This deal will generate
(b).
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Minimum selling price $
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If Splish World could avoid all variable SG&A costs on this order, what would be the minimum selling price for the special order?
(Round answer to 2 decimal places, e.g. 15.25.)
per unit
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Transcribed Image Text:Splish World manufactures a workout product, CardioBands, that helps users raise their heartbeats without exerting too much effort.
The per-unit costs to manufacture and sell this rubber-band-based product are as follows.
DM
DL
Variable-MOH
Fixed-MOH
Variable SG&A
Fixed SG&A
Total
$1.10
0.75
0.30
1.55
0.25
0.95
$4.90
Splish World normally sells its CardioBands for $15 each. Jerry's Gym wants to purchase 50 of these workout products to incorporate
in two of its cardio classes, but it wants a special price of $220 for the complete order. Splish World has enough production capacity to
take on this special order.
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