Part 2 contains 3 Decision making recommendations that are independent of each other. This part...
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Part contains Decision making recommendations that are independent of each other. This part covers material in Module Decision Making #Special Order Omaha Wire produces gauge barbed wire that is sold to farm supply companies. Currently the company has capacity to produce tons of wire per year. It is operating at of annual capacity. The cost per ton of wire is as follows: The average sales price is $ per ton. The state of Nebraska has approached the company to supply tons for the states prisons for $ per ton. Direct material $ Direct labor $ Variable Overhead $ Fixed Overhead Total Cost per ton $ Required: If the special order is accepted, calculate the specific change in income for only the special order. Make sure you show your work and explain what the relevant costs are for the special order. Provide a recommendation to management if the company should accept or reject this special order. Explain in detail your recommendation to management including the change to income that applies to the special order.
Part contains Decision making recommendations that are independent of each other. This part covers material in Module
Decision Making #Special Order
Omaha Wire produces gauge barbed wire that is sold to farm supply companies. Currently the company has capacity to produce tons of wire per year.
It is operating at of annual capacity. The cost per ton of wire is as follows:
The average sales price is $ per ton. The state of Nebraska has approached the company to supply tons for the states prisons for $ per ton.
Direct material $
Direct labor $
Variable Overhead $
Fixed Overhead
Total Cost per ton $
Required:
If the special order is accepted, calculate the specific change in income for only the special order. Make sure you show your work and explain what the relevant costs are for the special order.
Provide a recommendation to management if the company should accept or reject this special order. Explain in detail your recommendation to management including the change to income that applies to the special order.
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