1 answer

Imperial Jewelers manufactures and sells a gold bracelet for $410.00. The company's accounting system says that...

Question:

Imperial Jewelers manufactures and sells a gold bracelet for $410.00. The companys accounting system says that the unit prod

neuneu. 1. What is the financial advantage (disadvantage) of accepting the special order from the wedding party? 2. Should th

Required 1 Required 2 Should the company accept the special order? Yes ONO

Imperial Jewelers manufactures and sells a gold bracelet for $410.00. The company's accounting system says that the unit product cost for this bracelet is $259.00 as shown below: $145 82 Direct materials Direct labor Manufacturing overhead Unit product cost 32 $259 The members of a wedding party have approached Imperial Jewelers about buying 14 of these gold bracelets for the discounted price of $370.00 each. The members of the wedding party would like special filigree applied to the bracelets that would require Imperial Jewelers to buy a special tool for $454 and that would increase the direct materials cost per bracelet by $8. 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, $9.00 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 the wedding party? 2. Should the company accept the special order?
neuneu. 1. What is the financial advantage (disadvantage) of accepting the special order from the wedding party? 2. Should the company accept the special order? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) of accepting the special order from the wedding party? Reguiled Required 2 >
Required 1 Required 2 Should the company accept the special order? Yes ONO

Answers

Special order revenue = 14*370 = 5180

Cost of making

= (145+8+82+9)*14 + 454 = 3870

Financial advantage = 5180 - 3870

Financial advantage = 1310

Yes.

Comment if you face any issues

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