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Question: The sparkle Company manufactures affordable costume jewelry. At the beginning of the year, the sp…
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Question: The sparkle Company manufactures affordable costume jewelry. At the beginning of the year, the sp...

Show transcribed image text The sparkle Company manufactures affordable costume jewelry. At the beginning of the year, the sparkle Company received a request from an oversees customer who would like to purchase 10,000 necklaces for a Breast Cancer Fund Raising event; due to the large order the customer has offered to purchase each necklace for $80 (current selling price is $150 per unit). If the Sparkle Company accepts special order, then an additional $10,000 in shipping costs and $20,000 in custom packaging/wrapping will be incurred. In addition, the order will require each necklace have special engraving that will cost $3 per necklace. If the special order is accepted, only the $2 of fixed overhead will be relevant as this will cover the supervisor salary. The remaining fixed costs will be incurred with or without the special order. The company currently has the capacity to produce the 10,000 necklaces without incurring any additional fixed costs for factory space. Current Price Structure for the each necklaces(excludes special order) Direct Labor ellipsis $10 Direct Materials ellipsis $60 Fixed Cost per unit(includes $2 per unit for the supervisor) ellipsis 10 Sales Commission ellipsis $3 Total cost per unit ellipsis $83 Which of the following is true if the Specific Company accepts the special order?

The sparkle Company manufactures affordable costume jewelry. At the beginning of the year, the sparkle Company received a request from an oversees customer who would like to purchase 10,000 necklaces for a Breast Cancer Fund Raising event; due to the large order the customer has offered to purchase each necklace for $80 (current selling price is $150 per unit). If the Sparkle Company accepts special order, then an additional $10,000 in shipping costs and $20,000 in custom packaging/wrapping will be incurred. In addition, the order will require each necklace have special engraving that will cost $3 per necklace. If the special order is accepted, only the $2 of fixed overhead will be relevant as this will cover the supervisor salary. The remaining fixed costs will be incurred with or without the special order. The company currently has the capacity to produce the 10,000 necklaces without incurring any additional fixed costs for factory space. Current Price Structure for the each necklaces(excludes special order) Direct Labor ellipsis $10 Direct Materials ellipsis $60 Fixed Cost per unit(includes $2 per unit for the supervisor) ellipsis 10 Sales Commission ellipsis $3 Total cost per unit ellipsis $83 Which of the following is true if the Specific Company accepts the special order?

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