Miyamoto jewelers is considering a special order for 20

Reference no: EM13581475

Miyamoto Jewelers is considering a special order for 20 handcrafted gold bracelets to be given as gifts to members of a wedding party. The normal selling price of a gold bracelet is $409 and its unit product cost is $265 as shown below:


Direct materials	$	149
Direct labor		82
Manufacturing overhead		34

Unit product cost	$	265

Most of the manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $11 of the overhead is variable with respect to the number of bracelets produced. The customer who is interested in the special bracelet order would like special filigree applied to the bracelets. This filigree would require additional materials costing $10 per bracelet and would also require acquisition of a special tool costing $455 that would have no other use once the special order is completed. This order would have no effect on the company%u2019s regular sales and the order could be fulfilled using the company%u2019s existing capacity without affecting any other order.

Required:

a.	What effect would accepting this order have on the company's net operating income if a special price of $369 is offered per bracelet for this order?

Reference no: EM13581475

Questions Cloud

Assume the effective interest method in accounting for : on 1-1-2014 avion inc. sold bonds with these

A cylindrical steel pressure vessel with volume 132m3 is to : a cylindrical steel pressure vessel with volume 1.32m3 is to be tested. the vessel is entirely filled with water then a

Perdue company has purchased equipment that requires : perdue company has purchased equipment that requires annual payments of 30000 to be paid at the end of each of the next

The new sewing machine would be depreciated according to : hiland inc. manufactures snowsuits. hiland is considering purchasing a new sewing machine at a cost of 2.45 million.

Miyamoto jewelers is considering a special order for 20 : miyamoto jewelers is considering a special order for 20 handcrafted gold bracelets to be given as gifts to members of a

Jobbs company issues a 5 two year bonds on dec 31 2010 with : jobbs company issues a 5 two year bonds on dec 31 2010 with a par value of 200000 and semiannual interest payments. use

What is the pressure at a depth of 5000 m in the : a what is the pressure at a depth of 5000 m in the ocean?b what is the fractional volume changenbsp? vv of seawater at

Jsephine keller controller of kingh corp is aware that a : josephine keller controller of kingh corp. is aware that a pronouncement on accounting changes has been issued. after

The beginning inventory at keats office supplies and data : the beginning inventory at keats office supplies and data on purchases and sales for a three-month period are as

User Account

All Pages