Miyamoto Jewelers is considering a special order for 17 handcrafted gold bracele
ID: 2344943 • Letter: M
Question
Miyamoto Jewelers is considering a special order for 17 handcrafted gold bracelets to be given as gifts to members of a wedding party. The normal selling price of a gold bracelet is $405 and its unit product cost is $269 as shown below:
Most of the manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $14 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 $13 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
Miyamoto Jewelers is considering a special order for 17 handcrafted gold bracelets to be given as gifts to members of a wedding party. The normal selling price of a gold bracelet is $405 and its unit product cost is $269 as shown below:
Explanation / Answer
costs: DM 144*17 = 2448 DL 86*17 = 1462 VOH 14*17 = 238 filigree 13*17 = 221 special tool 455 total: 4824 sales revenue: 365*17 = 6205 6205 - 4824 = 1381 answer: Increase by 1381