Orange Bliss manufactures two products, Frozen and Rocks, that sell for $80 and $60 respectively. The company produced 100,000 units last year and at that level of activity, the average cost per unit were: direct materials direct labor variable manu. overhead traceable/avoidable fixed variable selling & admin allocated/unavoidable fixed total cost per unit Frozen Rocks $20 $15 $18 $12 $7 $12 $15 $13 $5 $3 $12 $7 $-- Orange Bliss received an inquiry from the Bartender's Association of America to buy 10,379 "Rocks" for $61 each. They have capacity to fill this order without interfering with normal customer demand. The variable selling costs for this order are the same as regular units and no new fixed costs are needed to complete the order. What is the advantage (disadvantage) of accepting this order? Round to nearest whole number with disadvantage expressed as a negative.
Orange Bliss manufactures two products, Frozen and Rocks, that sell for $80 and $60 respectively. The company produced 100,000 units last year and at that level of activity, the average cost per unit were: direct materials direct labor variable manu. overhead traceable/avoidable fixed variable selling & admin allocated/unavoidable fixed total cost per unit Frozen Rocks $20 $15 $18 $12 $7 $12 $15 $13 $5 $3 $12 $7 $-- Orange Bliss received an inquiry from the Bartender's Association of America to buy 10,379 "Rocks" for $61 each. They have capacity to fill this order without interfering with normal customer demand. The variable selling costs for this order are the same as regular units and no new fixed costs are needed to complete the order. What is the advantage (disadvantage) of accepting this order? Round to nearest whole number with disadvantage expressed as a negative.
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 6PA: Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A...
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