Use the following information for Exercises 8-40 and 8-41:
Smooth Move Company manufactures professional paperweights and has been approached by a new customer with an offer to purchase 15,000 units at a per-unit price of $7.00. The new customer is geographically separated from Smooth Move’s other customers, and existing sales will not be affected. Smooth Move normally produces 82,000 units but plans to produce and sell only 65,000 in the coming year. The normal sales price is $12 per unit. Unit cost information is as follows:
8-41 Special Order
Refer to the information for Smooth Move Company on the previous page. Suppose a customer wants to have its company logo affixed to each paperweight using a label. Smooth Move would have to purchase a special logo labeling machine that will cost $12,000. The machine will be able to label the 15,000 units and then it will be scrapped (with no further value). No other fixed overhead activities will be incurred. In addition, each special logo requires additional direct materials of $0.20.
Required:
CONCEPTUAL CONNECTION Should Smooth Move accept the special order? By how much will profit increase or decrease if the order is accepted?
Financial & Managerial Accounting
College Accounting, Chapters 1-27
Accounting Information Systems
Corporate Financial Accounting
Intermediate Accounting: Reporting And Analysis
Financial And Managerial Accounting
Financial Accounting
Fundamentals of Financial Management (MindTap Course List)
Principles of Macroeconomics (MindTap Course List)
Management, Loose-Leaf Version
STATISTICS F/BUSINESS+ECONOMICS-TEXT
Fundamentals of Financial Management, Concise Edition (MindTap Course List)
Accounting Information Systems
Contemporary Marketing
Brief Principles of Macroeconomics (MindTap Course List)
Foundations of Business (MindTap Course List)
Principles of Economics (MindTap Course List)
MKTG 12:STUDENT ED.-TEXT
Essentials of Economics (MindTap Course List)
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
Essentials of Business Communication (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
Financial Accounting
College Accounting (Book Only): A Career Approach
Financial & Managerial Accounting
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
Accounting (Text Only)
College Accounting (Book Only): A Career Approach
Fundamentals of Financial Management (MindTap Course List)
Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)
Exploring Economics
Principles of Macroeconomics (MindTap Course List)
Statistics for Business & Economics, Revised (MindTap Course List)
Pkg Acc Infor Systems MS VISIO CD
Corporate Financial Accounting
PAYROLL ACCT.,2019 ED.(LL)-TEXT
Survey of Accounting (Accounting I)
Purchasing and Supply Chain Management
Cornerstones of Cost Management (Cornerstones Series)
Macroeconomics
Economics (MindTap Course List)
Economics For Today
Practical Management Science
Microeconomics
Managerial Accounting
Cornerstones of Financial Accounting
Macroeconomics: Private and Public Choice (MindTap Course List)
Understanding Management (MindTap Course List)
Principles of Microeconomics
Micro Economics For Today
Economics: Private and Public Choice (MindTap Course List)
MACROECONOMICS FOR TODAY
Microeconomics: Private and Public Choice (MindTap Course List)