Reference no: EM132528477

Point 1: Clearview Window Company manufactures windows for the home-building industry. The window frames are produced in the Frame Division. The frames are then transferred to the Glass Division, where the glass and hardware are installed. The company's best-selling product is a three-by-four-foot, doublepaned operable window.

Point 2: The Frame Division also can sell frames directly to custom home builders, who install the glass and hardware. The sales price for a frame is $165. The Glass Division sells its finished windows for $390. The markets for both frames and finished windows exhibit perfect competition.

The standard variable cost of the window is detailed as follows:

                     Frame Division           Glass Division

DL                   31                          69

DM                  40                           31

VOH                69                          69

Total             140                          169

• The Glass Division has been approached by the U.S. Army with a special order for 1,100 windows at $334. Assume the transfer price established in requirement 2-c. above is being used.

Question 1: What is the incremental contribution (loss) per window for Clearview Window Company as a whole if this special order is accepted?