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Piper Rose Boutique has been approached by the community college to make special polo shirts for the faculty and staff. The college is willing to buy 4,000 polos with shirts for $12.00 each. The company has enough excess capacity to make this order. A breakdown of the costs is as follows: Direct materials Direct labor Variable factory overhead Fixed factory overhead Total cost per unit $2.00 0.50 1.50 2.50 $6.50 Should Piper Rose Boutique accept the special order made by the college? Proposal to Sell Polo Shirts to College Differential revenue from accepting offer Differential variable costs of additional units Differential income (loss) from accepting the offer $ The order should be s own design for $6.00 each. The company normally sells its

Piper Rose Boutique has been approached by the community college to make special polo shirts for the faculty and staff. The college is willing to buy 4,000 polos with shirts for $12.00 each. The company has enough excess capacity to make this order. A breakdown of the costs is as follows: Direct materials Direct labor Variable factory overhead Fixed factory overhead Total cost per unit $2.00 0.50 1.50 2.50 $6.50 Should Piper Rose Boutique accept the special order made by the college? Proposal to Sell Polo Shirts to College Differential revenue from accepting offer Differential variable costs of additional units Differential income (loss) from accepting the offer $ The order should be s own design for $6.00 each. The company normally sells its

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter17: Activity Resource Usage Model And Tactical Decision Making
Section: Chapter Questions
Problem 18E: A company is considering a special order for 1,000 units to be priced at 8.90 (the normal price...
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Piper Rose Boutique has been approached by the community college to make special polo shirts for the faculty and staff. The college is willing to buy 4,000 polos with its own design for $6.00 each. The company normally sells its shirts for $12.00 each. The company has enough excess capacity to make this order. A breakdown of the costs is as follows: Direct materials. Direct labor Variable factory overhead $2.00 0.50 1.50 2.50 $6.50 Fixed factory overhead Total cost per unit Should Piper Rose Boutique accept the special order made by the college? Proposal to Sell Polo Shirts to College Differential revenue from accepting offer Differential variable costs of additional units Differential income (loss) from accepting the offer The order should be $
Transcribed Image Text:Piper Rose Boutique has been approached by the community college to make special polo shirts for the faculty and staff. The college is willing to buy 4,000 polos with its own design for $6.00 each. The company normally sells its shirts for $12.00 each. The company has enough excess capacity to make this order. A breakdown of the costs is as follows: Direct materials. Direct labor Variable factory overhead $2.00 0.50 1.50 2.50 $6.50 Fixed factory overhead Total cost per unit Should Piper Rose Boutique accept the special order made by the college? Proposal to Sell Polo Shirts to College Differential revenue from accepting offer Differential variable costs of additional units Differential income (loss) from accepting the offer The order should be $
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