The following information relates to a one-time special order from a flood relief organization for 200 of its book bags at $8.50. Current manufacturing costs are as follows.
$\begin{array}{lr}
\text { Direct Material per bag } & \$ 3.24 \
\text { Direct Labor } & 4.21 \
\text { Variable Manufacturing Overhead } & .55 \
\text { Variable Selling costs } & .76 \
\text { Fixed Manufacturing Overhead } & 1.25
\end{array}$
Fixed manufacturing overhead is based on capacity of 4,500 units per year. Normal sales is 4,000 book bags per year. Only $0.46 of the selling costs will be incurred for this special order. What are the relevant costs regarding this special order? Pose one nonfinancial consideration regarding the acceptance or rejection of this special offer.

Question

The following information relates to a one-time special order from a flood relief organization for 200 of its book bags at $8.50. Current manufacturing costs are as follows.
 $\begin{array}{lr}
\text { Direct Material per bag } & \$ 3.24 \
\text { Direct Labor } & 4.21 \
\text { Variable Manufacturing Overhead } & .55 \
\text { Variable Selling costs } & .76 \
\text { Fixed Manufacturing Overhead } & 1.25
\end{array}$ 
Fixed manufacturing overhead is based on capacity of 4,500 units per year. Normal sales is 4,000 book bags per year. Only $0.46 of the selling costs will be incurred for this special order. What are the relevant costs regarding this special order? Pose one nonfinancial consideration regarding the acceptance or rejection of this special offer.

Quizplus · Accepted Answer

The Answer of The following information relates to a one-time special order from a flood relief organization for 200 of its book bags at $8.50. Current manufacturing costs are as follows.
 $\begin{array}{lr}
\text { Direct Material per bag } & \$ 3.24 \
\text { Direct Labor } & 4.21 \
\text { Variable Manufacturing Overhead } & .55 \
\text { Variable Selling costs } & .76 \
\text { Fixed Manufacturing Overhead } & 1.25
\end{array}$ 
Fixed manufacturing overhead is based on capacity of 4,500 units per year. Normal sales is 4,000 book bags per year. Only $0.46 of the selling costs will be incurred for this special order. What are the relevant costs regarding this special order? Pose one nonfinancial consideration regarding the acceptance or rejection of this special offer.

The Following Information Relates to a One-Time Special Order from a Flood