Lecture 11_12_10 - Managerial Accounting November 12, 2010...

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Unformatted text preview: Managerial Accounting November 12, 2010 Chapter 11 part 2 Special orders Constrained resources Special order : one time order. Not part of routine revenue producing production Current production cost: Direct materials: $372 Direct labor: 90 Mfg overhead: 102 Unit product cost $564 Example: Received an order for 100 modified units of specialty bikes at $558 each . Normal selling price is $698 Should special order be accepted? Normal production cost: Direct materials: $372 Direct labor: 90 Mfg overhead: 102 Unit product cost $564 Additional data: Mfg overhead of $102. Variable portion is $12 per unit Additional costs for special order: Variable cost: $34 per unit New graphics design: $2,400 Effect on current production : none Current cost: Effect of special order: Cost of special order Direct materials: $372 None $372 Direct labor: 90 None 90 Variable Mfg OH 12 None 12 Addl VC $34 34...
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Lecture 11_12_10 - Managerial Accounting November 12, 2010...

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