Slugger Corporation produces baseball bats for kids that it sells for $36 each. At capacity, the company can produce 50,000 bats a year. The costs of producing and selling 50,000 bats are as follows: Cost per BatTotal costsDirect materials$13$650,000Direct manufacturing labor5250,000Variable manufacturing overhead2100,000Fixed manufacturing overhead6300,000Variable selling expenses3150,000Fixed selling expenses2100,000Total costs$31$1,550,000Additional information:Suppose Slugger is currently producing and selling 40,000 bas. At this level of production and sales, its fixed costs are the same as given in preceding table.Bench Corporation wants to place a one-time special order for 10,000 bats at $23 each.Suppose Slugger will incur no variable selling costs for this special order.Q2-2. List all assumptions when Slugger makes the special order decision.Q2-3. Should Slugger accept this one-time special order? Show your calculations and clearly identify relevant revenues and costs information.

The decision to accept the special order is taken by calculating the increase in net operating…

Answered: Slugger Corporation produces baseball…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 11EB: Power Corp. makes 2 products: blades for table saws and blades for handsaws. Each product passes...

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Slugger Corporation produces baseball bats for kids that it sells for $36 each. At capacity, the company can produce 50,000 bats a year. The costs of producing and selling 50,000 bats are as follows:

	Cost per Bat	Total costs
Direct materials	$13	$650,000
Direct manufacturing labor	5	250,000
Variable manufacturing overhead	2	100,000
Fixed manufacturing overhead	6	300,000
Variable selling expenses	3	150,000
Fixed selling expenses	2	100,000
Total costs	$31	$1,550,000

Additional information:

Suppose Slugger is currently producing and selling 40,000 bas. At this level of production and sales, its fixed costs are the same as given in preceding table.
Bench Corporation wants to place a one-time special order for 10,000 bats at $23 each.
Suppose Slugger will incur no variable selling costs for this special order.

Q2-2. List all assumptions when Slugger makes the special order decision.

Q2-3. Should Slugger accept this one-time special order? Show your calculations and clearly identify relevant revenues and costs information.

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