Introduction To Managerial Accounting
8th Edition
ISBN: 9781259917066
Author: BREWER, Peter C., Garrison, Ray H., Noreen, Eric W.
Publisher: Mcgraw-hill Education,
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Chapter 11, Problem 4E
Special Order Decision
Imperial Jewelers manufactures and sells a gold bracelet for $189.95. The company’s accounting system says that the unit product cost for this bracelet is $14900 as shown below:
The members of a wedding party hive approached Imperial Jewelers about buying 20 of these gold bracelets for the discounted price of $169.95 each. The members of the wedding party would like special filigree applied to the bracelets that would require Imperial Jewelers to buy a special tool for $250 and that would increase the direct materials cost per bracelet by S2 00. 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
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?
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Imperial Jewelers manufactures and sells a gold bracelet for $404.00. The company's accounting system says that the unit product
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The members of a wedding party have approached Imperial Jewelers about buying 17 of these gold bracelets for the discounted price
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materials cost per bracelet by $11. Imperial Jewelers would also have to buy a special tool for $467 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, $12.00 of the overhead is variable…
Imperial Jewelers manufactures and sells a gold bracelet for $407.00. The company's accounting system
says the unit product cost for this bracelet is $267.00, as shown below:
Direct materials
$ 142
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Unit product cost $ 267
A wedding party has approached Imperial Jewelers about buying 20 gold bracelets for the discounted
price of $367.00 each. 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 have to buy a special tool
for $459 to apply the filigree to the bracelets. The special tool would have no other use once the special
order is completed.
Manufacturing overhead
To analyze this special order, Imperial Jewelers determined 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…
Imperial Jewelers manufactures and sells a gold bracelet for $400.00. The company's accounting system says that the unit product
cost for this bracelet is $272.00 as shown below:
Direct materials
Direct labor
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$150
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35
$ 272
The members of a wedding party have approached Imperial Jewelers about buying 20 of these gold bracelets for the discounted price
of $360.00 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 $11. Imperial Jewelers would also have to buy a special tool for $466 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, $12.00 of the overhead is…
Chapter 11 Solutions
Introduction To Managerial Accounting
Ch. 11 - What is a relevant cost?Ch. 11 - Define the following terms: incremental cost,...Ch. 11 - Are variable costs always relevant costs? Explain.Ch. 11 - Prob. 4QCh. 11 - “Variable costs and differential costs mean the...Ch. 11 - Prob. 6QCh. 11 - Prentice Company is considering dropping one of...Ch. 11 - Prob. 8QCh. 11 - What is the danger in allocating common fixed...Ch. 11 - Prob. 10Q
Ch. 11 - Give at least four examples of possible...Ch. 11 - Prob. 12QCh. 11 - Define the following terms: joint products, joint...Ch. 11 - Prob. 14QCh. 11 - Prob. 15QCh. 11 - Prob. 16QCh. 11 - The Excel worksheet form that appears below is to...Ch. 11 - The Excel worksheet form that appears below is to...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Prob. 9F15Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Prob. 13F15Ch. 11 - Prob. 14F15Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Identifying Relevant Costs Syahn, AB, is a Swedish...Ch. 11 - Prob. 2ECh. 11 - Make or Buy Decision Troy Engines, Ltd,...Ch. 11 - Special Order Decision Imperial Jewelers...Ch. 11 - Volume Trade-off Decisions Outdoor Luggage, Inc.,...Ch. 11 - Prob. 6ECh. 11 - Sell or Process Further Decisions Dorsey Company...Ch. 11 - Volume Trade-Off Decisions Barlow Company...Ch. 11 - Special Order Decision Delta Company produces a...Ch. 11 - Make or Buy Decision Futura Company purchases the...Ch. 11 - Make or Buy Decision Han Products manufactures...Ch. 11 - Volume Trade-Off Decisions Benoit Company produces...Ch. 11 - Prob. 13ECh. 11 - Identification of Relevant Costs Kristen Lu...Ch. 11 - Prob. 15ECh. 11 - Identification of Relevant Costs Bill has just...Ch. 11 - Prob. 17ECh. 11 - Prob. 18PCh. 11 - Dropping or Retaining a Segment Jackson Count...Ch. 11 - Sell or Process Further Decision (Prepared from a...Ch. 11 - Prob. 21PCh. 11 - Prob. 22PCh. 11 - Make or Buy Decision Silven Industries, which...Ch. 11 - Prob. 24PCh. 11 - Prob. 25PCh. 11 - Close or Retain a Store Superior Markets. Inc.,...Ch. 11 - Sell or Process Further Decisions Come-Clean...Ch. 11 - Make or Buy Decisions “In my opinion, we ought to...
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