FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
Bartleby Related Questions Icon

Related questions

Question

Please help me 

Imperial Jewelers manufactures and sells a gold bracelet for $408.00. The company's accounting system says that the unit product
cost for this bracelet is $269.00 as shown below:
Direct materials
Direct labor
Manufacturing overhead
Unit product cost
$ 142
88
39
$ 269
The members of a wedding party have approached Imperial Jewelers about buying 15 of these gold bracelets for the discounted price
of $368.00 each. The members of the wedding party would like special filigree applied to the bracelets that would increase the direct
materials cost per bracelet by $10. Imperial Jewelers would also have to buy a special tool for $465 to apply the filigree to the
bracelets. 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, $11.00 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?
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?
Required 1
Required 2 >
expand button
Transcribed Image Text:Imperial Jewelers manufactures and sells a gold bracelet for $408.00. The company's accounting system says that the unit product cost for this bracelet is $269.00 as shown below: Direct materials Direct labor Manufacturing overhead Unit product cost $ 142 88 39 $ 269 The members of a wedding party have approached Imperial Jewelers about buying 15 of these gold bracelets for the discounted price of $368.00 each. The members of the wedding party would like special filigree applied to the bracelets that would increase the direct materials cost per bracelet by $10. Imperial Jewelers would also have to buy a special tool for $465 to apply the filigree to the bracelets. 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, $11.00 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? 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? Required 1 Required 2 >
Expert Solution
Check Mark
Knowledge Booster
Background pattern image
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education