xercise 13-4 (Algo) Special Order Decision [LO13-4] Imperial Jewelers manufactures and sells a gold bracelet for $404.00. The company's accounting system says that the unit product cost for this bracelet is $266.00 as shown below: Direct materials $147 Direct labor 84 35 Unit product cost $ 266 The members of a wedding party have approached Imperial Jewelers about buying 15 of these gold bracelets for the discounted price of $364.00 each. The members of the wedding party would like special filigree applied to the bracelets that would increase the direct materials cost per bracelet by $10. Imperial Jewelers would also have to buy a special tool for $466 to apply the filigree to the bracelets. The special tool would have no other use once the special order is completed. Manufacturing overhead To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $11.00 of the overhead is variable with respect to the number of bracelets produced. The company also believes that accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party's order using its existing manufacturing capacity. Required: 1. What is the financial advantage (disadvantage) of accepting the special order from th
xercise 13-4 (Algo) Special Order Decision [LO13-4] Imperial Jewelers manufactures and sells a gold bracelet for $404.00. The company's accounting system says that the unit product cost for this bracelet is $266.00 as shown below: Direct materials $147 Direct labor 84 35 Unit product cost $ 266 The members of a wedding party have approached Imperial Jewelers about buying 15 of these gold bracelets for the discounted price of $364.00 each. The members of the wedding party would like special filigree applied to the bracelets that would increase the direct materials cost per bracelet by $10. Imperial Jewelers would also have to buy a special tool for $466 to apply the filigree to the bracelets. The special tool would have no other use once the special order is completed. Manufacturing overhead To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $11.00 of the overhead is variable with respect to the number of bracelets produced. The company also believes that accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party's order using its existing manufacturing capacity. Required: 1. What is the financial advantage (disadvantage) of accepting the special order from th
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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![xercise 13-4 (Algo) Special Order Decision [LO13-4]
Imperial Jewelers manufactures and sells a gold bracelet for $404.00. The company's accounting system says that the unit
product cost for this bracelet is $266.00 as shown below:
Direct materials
$ 147
Direct labor
84
Manufacturing overhead 35
Unit product cost $ 266
The members of a wedding party have approached Imperial Jewelers about buying 15 of these gold bracelets for the
discounted price of $364.00 each. The members of the wedding party would like special filigree applied to the bracelets
that would increase the direct materials cost per bracelet by $10. Imperial Jewelers would also have to buy a special tool
for $466 to apply the filigree to the bracelets. The special tool would have no other use once the special order is
completed.
To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is
fixed and unaffected by variations in how much jewelry is produced in any given period. However, $11.00 of the overhead
is variable with respect to the number of bracelets produced. The com y also believes that accepting this order would
have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the
wedding party's order using its existing manufacturing capacity.
Required:
1. What is the financial advantage (disadvantage) of accepting the special order from th](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff516e717-d9d1-4d7d-8635-8b8959308df8%2F4f19a920-d2cf-4db1-b1b7-193fb8e7b026%2Fi38hry_processed.jpeg&w=3840&q=75)
Transcribed Image Text:xercise 13-4 (Algo) Special Order Decision [LO13-4]
Imperial Jewelers manufactures and sells a gold bracelet for $404.00. The company's accounting system says that the unit
product cost for this bracelet is $266.00 as shown below:
Direct materials
$ 147
Direct labor
84
Manufacturing overhead 35
Unit product cost $ 266
The members of a wedding party have approached Imperial Jewelers about buying 15 of these gold bracelets for the
discounted price of $364.00 each. The members of the wedding party would like special filigree applied to the bracelets
that would increase the direct materials cost per bracelet by $10. Imperial Jewelers would also have to buy a special tool
for $466 to apply the filigree to the bracelets. The special tool would have no other use once the special order is
completed.
To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is
fixed and unaffected by variations in how much jewelry is produced in any given period. However, $11.00 of the overhead
is variable with respect to the number of bracelets produced. The com y also believes that accepting this order would
have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the
wedding party's order using its existing manufacturing capacity.
Required:
1. What is the financial advantage (disadvantage) of accepting the special order from th
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