selling 10,000 cases per month?b-2. What is the opportunity cost of not accepting the offer?c-1. What is the impact on monthly operating profit if the special order is accepted and Heavenly Treatscapacity of 12,000 cases per month?c-2. What is the opportunity cost of accepting the offer?he specorder is accepted and Heavenly TreatX Answer is complete but not entirely correct.a.Incremental unit cost of creating a normal case25Incremental unit cost of creating a special-order case27 Vb-Impact on operating profit2,000Increase1.b-2.Opportunity cost2,000C-Impact on operating profit8,000 XDecrease1.$28,000 XC-Opportunity cost2.< Prev3 of 4Next >étv llNOV2321280%24%24%24%24%24%24 Exercise 21.5 (Static) Special Order Decisions and Opportunity Costs (LO21-1, LO21-2, LO21-3, L021-4)Heavenly Treat manufactures cases of hot chocolate that are typically sold to restaurants. Its main factory has the capacity to produceand sell 12,000 cases per month. The following information is available for the factory.Sales price per caseVariable cost per case:Direct materialsDirect laborVariable overhead & sales commissionsFixed costs per month4012310$ 60,000Wildwood Camps is a youth organization that serves hot chocolate at its camping facilities throughout Montana. The organization hasoffered Heavenły Treat $29 per case for a special-order batch of 1,000 cases. Each case would require a shrink-wrap coveringbecause of moisture problems associated with the organization's storage warehouses. The cost to shrink-wrap the order is estimatedat $3 per case. Selling costs associated with the order would be decreased by $1 per case because it would not include any salescommissions.a. What is the normal incremental cost of producing and selling a case of hot chocolate? What is the incremental cost per caseassociated with this special-order?b-1. What is the impact on monthly operating profit if the special order is accepted and Heavenly Treats is currently producing andselling 10,000 cases per month?b-2. What is the opportunity cost of not accepting the offer?c-1. What is the impact on monthly operating profit if the special order is accepted and Heavenly Treats is currently operating at its fullcapacity of 12,000 cases per month?c-2. What is the opportunity cost of accepting the offer?< Prev3 of 4Next >23NOV21280MacB%24

Incremental cost refers to the total expenses that arise when the company produces an additional unit of a product in a desired frame of time. a)Preparing the statement as follows: Direct Material $ 12 Direct Labor $ 3 Variable Overhead & Sales Commission $ 10 Normal Incremental Cost $ 25 Direct Material $ 12 Direct Labor $ 3 Variable Overhead & Sales Commission $ 9 Special Packaging $ 3 Incremental Cost for Special Order $ 27 b-1) Preparing the statement to compute the effect on net operating income as follows: Incremental Revenue $ 29,000 Incremental Costs Direct Material $ 12,000 Direct Labor $ 3,000 Variable Overhead & Sales Commission $ 9,000 Special Packaging $ 3,000 Total Incremental Costs $ 27,000 Increase / (Decrease) in Net Operating Income $ 2,000 Increase in Net Operating Income if a special order is accepted = $2000, b-2) Opportunity Cost of not accepting the order = $2000 c-) Preparing the statement to compute the effect on net operating income: Incremental Revenue $ 29,000 Incremental Costs Direct Material $ 12,000 Direct Labor $ 3,000 Variable Overhead & Sales Commission $ 9,000 Special Packaging $ 3,000 Total Incremental Costs $ 27,000 Income from Special Order $ 2,000 Loss of Contribution Margin from Regular sales $ (15,000) Increase / (Decrease) in Net Operating Income $ (13,000) Decrease in Net Operating Income if a special order is accepted = ($13000), c-2) Opportunity Cost of not accepting the order = ($13000) or $0

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What is the opportunity cost of not accepting the offer? What is the impact on monthly operating profit if the special order is accepte acity of 12,000 cases per month? - What is the opportunity cost of accepting the offer? X Answer is complete but not entirely correct. 25 Incremental unit cost of creating a normal case 27 Incremental unit cost of creating a special-order case $ %24