**Special Order**Total cost data follow for Glendale Manufacturing Company, which has a normal capacity per period of 8,000 units of product that sell for $60 each. For the foreseeable future, regular sales volume should continue to equal normal capacity.| Cost Item | Amount ($) ||------------------------------------|------------|| Direct material | 100,000 || Direct labor | 61,600 || Variable manufacturing overhead | 46,000 || Fixed manufacturing overhead (Note 1) | 38,400 || Selling expense (Note 2) | 35,200 || Administrative expense (fixed) | 15,000 || **Total** | **296,200**|**Notes:**1. Beyond normal capacity, fixed overhead costs increase $1,800 for each 500 units or fraction thereof until a maximum capacity of 10,000 units is reached.2. Selling expenses consist of a 6% sales commission and shipping costs of 80 cents per unit. Glendale pays only three-fourths of the regular sales commission on sales totaling 501 to 1,000 units and only two-thirds the regular commission on sales totaling 1,000 units or more.Glendale's sales manager has received a special order for 1,200 units from a large discount chain at a price of $36 each, F.O.B. factory. The controller's office has furnished the following additional cost data related to the special order:1. Changes in the product's design will reduce direct material costs by $1.50 per unit.2. Special processing will add 20% to the per-unit direct labor costs.3. Variable overhead will continue at the same proportion of direct labor costs.4. Other costs should not be affected.---This information is designed to illustrate cost behaviors and decision-making processes in manufacturing settings. The provided data and notes give insight into how special orders impact cost structures and profitability. By understanding these nuances, students can better grasp the complexities of managerial accounting and operational planning. ### Differential Analysis for Special Order Decision**a. Present an analysis supporting a decision to accept or reject the special order.** *(Round computations to the nearest cent.)*| Differential Analysis | Per Unit | Total ||--------------------------------------------|----------|-------|| **Differential revenue** | | $ || | | || **Differential costs** | | || Direct material | $ | || Direct labor | | || Variable manufacturing overhead | | || **Selling:** | | || Commission | | || Shipping (F.O.B. factory terms) | | || **Total variable cost** | $ | || | | || Contribution margin from special order | $ | || | | || **Fixed cost increment:** | | || Extra cost | | || | | || **Profit on special order** | | $ |**Explanation of Table:**- **Differential revenue:** This is the additional revenue that would be generated if the special order is accepted.- **Differential costs:** These are the additional costs incurred due to the special order. This includes direct material, direct labor, variable manufacturing overhead, and selling costs (e.g., commission and shipping under F.O.B. factory terms).- **Total variable cost:** The sum of all differential costs per unit.- **Contribution margin from special order:** This is the difference between the differential revenue and the total variable cost.- **Fixed cost increment:** Any fixed costs that will increase as a result of accepting the special order.- **Profit on special order:** The resultant profit after accounting for all additional revenue and costs associated with the special order.**b. What is the lowest price Glendale could receive and still make a profit of $3,600 before income taxes on the special order?** *Round answer to two decimal places, if applicable.*$ _______________---This example illustrates how to conduct a differential analysis to determine the feasibility of accepting a special order. Filling in the actual figures will help in making an informed decision.

Name: **Special Order**Total cost data follow for Glendale Manufacturing Co
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: **Special Order**Total cost data follow for Glendale Manufacturing Company, which has a normal capacity per period of 8,000 units of product that sell for $60 each. For the foreseeable future, regular sales volume should continue to equal normal cap