Jordan Quilting Company makes blankets that it markets through a variety of department stores. It makes...

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Jordan Quilting Company makes blankets that it markets through a variety of department stores. It makes the blankets in batch

business accounting

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Answer 1

Answer #1

product cost and facility cost wont be affected by special order so they are irrelevant

1-a



Cost
Material cost ( 500*$30)	$15,000
Labor ( 500*$24)	$12,000
Supplies ( 500 * $7 )	$3,500
Batch level cost ($5,000* 1 )	$5,000	$35,500
Number of units		500
Cost per unit		$71[$35,500/500]

Selling price= $64 per unit

As cost> selling price, order should not be accepted.

1-b

Cost
Material cost ( 2500*$30)	$75,000
Labor ( 2500*$24)	$60,000
Supplies ( 2500 * $7 )	$17,500
Batch level cost ($5,000* 1 )	$5,000	$157,500
Number of units		2,500
Cost per unit		$63[$109,500/2500]

As selling price> cost , order should be accepted - yes

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Answer 2

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