Dalton Quilting Company makes blankets that it markets through a variety of department stores. It makes the blankets in batches of 1,320 units. Dalton made 23,200 blankets during the prior accounting period. The cost of producing the blankets is summarized here. Materials cost ($10 per unit x 23,200) Labor cost ($9 per unit x 23,200) Manufacturing supplies ($1.50 x 23,200) Batch-level costs (20 batches at $3,696 per batch) Product-level costs Facility-level costs Total costs Cost per unit = $810,520 + 23,200 = $34.94 Required $ 232,000 208,800 34,800 73,920 92,800 168,200 $ 810,520 a. Sunny Motels has offered to buy a batch of 660 blankets for $25 each. Dalton's normal selling price is $46 per unit. Calculate the relevant cost per unit for the special order. Based on the preceding quantitative data, should Dalton accept the special order? b. Sunny offered to buy a batch of 1,320 blankets for $25 per unit. Calculate the relevant cost per unit for the special order. Should Dalton accept the special order? Note: For all requirements, round "Cost per unit" to 2 decimal places. a. Cost per unit a. Should Dalton accept the special order? b. Cost per unit b. Should Dalton accept the special order?
Dalton Quilting Company makes blankets that it markets through a variety of department stores. It makes the blankets in batches of 1,320 units. Dalton made 23,200 blankets during the prior accounting period. The cost of producing the blankets is summarized here. Materials cost ($10 per unit x 23,200) Labor cost ($9 per unit x 23,200) Manufacturing supplies ($1.50 x 23,200) Batch-level costs (20 batches at $3,696 per batch) Product-level costs Facility-level costs Total costs Cost per unit = $810,520 + 23,200 = $34.94 Required $ 232,000 208,800 34,800 73,920 92,800 168,200 $ 810,520 a. Sunny Motels has offered to buy a batch of 660 blankets for $25 each. Dalton's normal selling price is $46 per unit. Calculate the relevant cost per unit for the special order. Based on the preceding quantitative data, should Dalton accept the special order? b. Sunny offered to buy a batch of 1,320 blankets for $25 per unit. Calculate the relevant cost per unit for the special order. Should Dalton accept the special order? Note: For all requirements, round "Cost per unit" to 2 decimal places. a. Cost per unit a. Should Dalton accept the special order? b. Cost per unit b. Should Dalton accept the special order?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 21E: Ellerson Company provided the following information for the last calendar year: During the year,...
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