Awtrey quilting company makes blankets that it markets

Assignment Help Accounting Basics

Reference no: EM13598110

Awtrey Quilting Company makes blankets that it markets through a variety of department stores. It makes the blankets in batches of 1,000 units. Awtrey made 20,000 blankets during the prior accounting period. The cost of producing the blankets during is summarized here.

Materials cost ($21 per unit x 20,000) $420,000
Labor cost ($22 per unit x 20,000) $440,000
Manufacturing supplies ($2 x 20,000) 40,000
Batch-level costs (20 batches at $4,000 per batch) 80,000
Product-level costs 160,000
Facility-level costs 290,000
Total costs $1,430,000
Cost per unit = $1,430,000 / 20,000 = $71.50

Required

a. Sunny Motels has offered to buy a batch of 500 blankets for $51 each. Awtrey's normal selling price is $90 per unit. Based on the preceding quantitative data, should Awtrey accept the special order? Support your answer with appropriate computations.

b. Would your answer to Requirement a change if Sunny offered to buy a batch of 1,000 blankets for $51 per unit? Support your answer with appropriate computations.

c. Describe the qualitative factors that Awtrey Quiliting Company should consider before accepting a special order to sell blankets to Sunny Motels.

Reference no: EM13598110

Questions Cloud

An individual is currently 30 years old and she is planning : retirement planning info an individual is currently 30 years old and she is planning her financial needs upon

What methods are used to allocate the cost of operating : john recently came into a sum of money from an inheritance and is contemplating purchasing a small manufacturing

You have your choice of two investment accounts investment : you have your choice of two investment accounts. investment a is a 10-year annuity that features end-of-month 3100

Acetate inc has equity with a market value of 26 million : acetate inc. has equity with a market value of 26 million and debt with a market value of 10.14 million. treasury bills

Awtrey quilting company makes blankets that it markets : awtrey quilting company makes blankets that it markets through a variety of department stores. it makes the blankets in

Farr company purchased a new van for floral deliveries on : farr company purchased a new van for floral deliveries on january 1 2010. the van cost 36000 with an estimated life of

Spring manufacturing company makes tents that it sells : spring manufacturing company makes tents that it sells directly to camping enthusiants through a mail-order marketing

Guyer company publishes a monthly sports magazine fishing : guyer company publishes a monthly sports magazine fishing preview. subscriptions to the magazine cost 20 per year.

Jarmon airlines is a small airline that ocasionally carries : jarmon airlines is a small airline that ocasionally carries overload shipments for the overnight company never-fail

User Account

All Pages