Paper Roses Boutique has been approached by the community college to make special polo shirts for the faculty and staff. The college is willing to buy 4,000 polos with its own design for P6.00 each. The company normally sells its shirts for P12.00 each. The company has enough excess capacity to make this order. A breakdown of the costs is as follows: Direct materials P2.00 Direct labor 0.50 Variable factory overhead 1.50 Fixed factory overhead _2.50 Total cost per unit P6.50 Should Paper Roses Boutique accept the special order made by the college? Show computations, but a formal differential analysis report is not required.

Paper Roses Boutique has been approached by the community college to make special polo shirts for the faculty and staff. The college is willing to buy 4,000 polos with its own design for P6.00 each. The company normally sells its shirts for P12.00 each. The company has enough excess capacity to make this order. A breakdown of the costs is as follows: Direct materials P2.00 Direct labor 0.50 Variable factory overhead 1.50 Fixed factory overhead _2.50 Total cost per unit P6.50 Should Paper Roses Boutique accept the special order made by the college? Show computations, but a formal differential analysis report is not required.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter8: Standard Costs And Variances

Section: Chapter Questions

Problem 2EB: Salley is developing material and labor standards for her company. She finds that it costs $0.55 per...

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