David would like to order special holiday ornaments for his staff of 720 employees. He just found the perfect item clear glass globes with a unique design and material inside. The only issue is that the globes come from a small manufacturer with limited capacity. The manufacturer told David that it could only produce 360 of these ornaments for him without affecting its regular sales. Normally, these ornaments sell for $25.00 each and cost the company $20.00 to make (David does not know the company's cost structure). Included in the $20.00 cost per unit is $2.55 of fixed-MOH and $1.50 of variable-MOH. (a) Your Answer Correct Answer Your answer is correct. How much will operating income change for the small manufacturer if it produces 360 omaments for David and sells them at a special price of $20.00 per unit? (Round per unit calculations to 2 decimal places, eg 15.25 and final answer to 0 decimal places, e.g. 5,125.) Operating income increases (b) eTextbook and Media Solution by $ Your answer is partially correct. Operating income 918 How much will operating income change for the small manufacturer if it meets David's 720-ornament special order, at a selling price of $20.00 per unit, while reducing its regular sales by 360 units? (Round per unit calculations to 2 decimal places, eg 15.25 and final answer to 0 decimal places, e.g. 5,125.) decreases ✓by $ Attempts: 5 of 5 used 1800
David would like to order special holiday ornaments for his staff of 720 employees. He just found the perfect item clear glass globes with a unique design and material inside. The only issue is that the globes come from a small manufacturer with limited capacity. The manufacturer told David that it could only produce 360 of these ornaments for him without affecting its regular sales. Normally, these ornaments sell for $25.00 each and cost the company $20.00 to make (David does not know the company's cost structure). Included in the $20.00 cost per unit is $2.55 of fixed-MOH and $1.50 of variable-MOH. (a) Your Answer Correct Answer Your answer is correct. How much will operating income change for the small manufacturer if it produces 360 omaments for David and sells them at a special price of $20.00 per unit? (Round per unit calculations to 2 decimal places, eg 15.25 and final answer to 0 decimal places, e.g. 5,125.) Operating income increases (b) eTextbook and Media Solution by $ Your answer is partially correct. Operating income 918 How much will operating income change for the small manufacturer if it meets David's 720-ornament special order, at a selling price of $20.00 per unit, while reducing its regular sales by 360 units? (Round per unit calculations to 2 decimal places, eg 15.25 and final answer to 0 decimal places, e.g. 5,125.) decreases ✓by $ Attempts: 5 of 5 used 1800
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 6EB: Country Diner currently makes cookies for its boxed lunches. It uses 40,000 cookies annually in the...
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Question
Transcribed Image Text:David would like to order special holiday ornaments for his staff of 720 employees. He just found the perfect item clear glass globes
with a unique design and material inside. The only issue is that the globes come from a small manufacturer with limited capacity. The
manufacturer told David that it could only produce 360 of these ornaments for him without affecting its regular sales.
Normally, these ornaments sell for $25.00 each and cost the company $20.00 to make (David does not know the company's cost
structure). Included in the $20.00 cost per unit is $2.55 of fixed-MOH and $1.50 of variable-MOH.
(a)
Your Answer Correct Answer
Your answer is correct.
How much will operating income change for the small manufacturer if it produces 360 omaments for David and sells them at a
special price of $20.00 per unit? (Round per unit calculations to 2 decimal places, eg 15.25 and final answer to 0 decimal places, e.g.
5,125.)
Operating income increases
(b)
eTextbook and Media
Solution
by $
Your answer is partially correct.
Operating income
918
How much will operating income change for the small manufacturer if it meets David's 720-ornament special order, at a selling
price of $20.00 per unit, while reducing its regular sales by 360 units? (Round per unit calculations to 2 decimal places, eg 15.25 and
final answer to 0 decimal places, e.g. 5,125.)
decreases ✓by $
Attempts: 5 of 5 used
1800
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