QUESTION 5 Apollonia Company is part of an HMO that operates in a large Metropolitan area. Currently, Apollonia has its own dental laboratory to produce varieties of porcelain crowns. The selling price of the crown is $150 and the unit costs to produce the crowns are as follows: $ 40 Direct materials Direct labour 12 8 Variable manufacturing overhead Variable marketing expenses 4 20* Fixed manufacturing overhead Total costs 84 Manager of company, Jane has enough idle capacity to accept a one time only special order from Tom for 20,000 units of crown at $76 per unit. Jane will not incur any variable marketing expenses for the order. a. Evaluate above case above to determine whether Green Jane should accept the order. Supporting workings with calculations. b. In addition to the special order's effect on profits, determine the FIVE (5) factors should Jane's manager consider in deciding whether to accept the order.

QUESTION 5 Apollonia Company is part of an HMO that operates in a large Metropolitan area. Currently, Apollonia has its own dental laboratory to produce varieties of porcelain crowns. The selling price of the crown is $150 and the unit costs to produce the crowns are as follows: $ 40 Direct materials Direct labour 12 8 Variable manufacturing overhead Variable marketing expenses 4 20* Fixed manufacturing overhead Total costs 84 Manager of company, Jane has enough idle capacity to accept a one time only special order from Tom for 20,000 units of crown at $76 per unit. Jane will not incur any variable marketing expenses for the order. a. Evaluate above case above to determine whether Green Jane should accept the order. Supporting workings with calculations. b. In addition to the special order's effect on profits, determine the FIVE (5) factors should Jane's manager consider in deciding whether to accept the order.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 12EA: Rough Stuff makes 2 products: khaki shorts and khaki pants for men. Each product passes through the...

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