The Don't Bothers Co. manufactures moderate to high end hockey sticks. The FlyGrip Lite model has the following full unit costs for 5,000 units: Direct materials $25 Direct labor 10 Manufacturing overhead (60% variable) 24 Selling expenses (40% variable) 14 Administrative expenses (10% variable) 5 Total per unit $78 Gordon Bombay recently approached The Don't Bothers with a special order to purchase 1,000 units for $60. The Don't Bothers currently sell the model to consumers for $100. Capacity is sufficient to produce the extra 1,000 units. Variable selling expenses will be incurred on the special order. REQUIRED 1. Ignoring the special order, create a contribution margin income statement that shows the operating profit of the 5,000 units The Don't Bothers currently sells. 2. Determine the impact on profit of accepting the order. Should The Don't Bothers accept the special order? 3. Determine the minimum price The Don't Bothers would need on the special order so that before tax profits for the company would increase by $25,000 (over their current profit calculated in #1).

The Don't Bothers Co. manufactures moderate to high end hockey sticks. The FlyGrip Lite model has the following full unit costs for 5,000 units: Direct materials $25 Direct labor 10 Manufacturing overhead (60% variable) 24 Selling expenses (40% variable) 14 Administrative expenses (10% variable) 5 Total per unit $78 Gordon Bombay recently approached The Don't Bothers with a special order to purchase 1,000 units for $60. The Don't Bothers currently sell the model to consumers for $100. Capacity is sufficient to produce the extra 1,000 units. Variable selling expenses will be incurred on the special order. REQUIRED 1. Ignoring the special order, create a contribution margin income statement that shows the operating profit of the 5,000 units The Don't Bothers currently sells. 2. Determine the impact on profit of accepting the order. Should The Don't Bothers accept the special order? 3. Determine the minimum price The Don't Bothers would need on the special order so that before tax profits for the company would increase by $25,000 (over their current profit calculated in #1).

Name: Special OrderDownload the file to complete the problem in Excel, then
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Description: Special OrderDownload the file to complete the problem in Excel, then upload your file in the answer boxSpecial Order FileThe Don't Bothers Co. manufactures moderate to high end hockey sticks. The FlyGripLite model has the following full unit costs

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 4BE: Activity-based costing: selling and administrative expenses Jungle Junior Company manufactures and...

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