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please answer a and b
on out of 1.00 Flag question Special Order Total cost data follow for Glendale Manufacturing Company, which has a normal capa
course :: $ $ 3. Variable overhead will continue at the same proportion of direct labor costs. 4. Other costs should not be a
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Answer #1

Differential Anaylsis

Particulars per unit total
Differential revenue 36 43,200
Differential costs
DM 11 13,200
DL 9.24 11,088
VMOH 6.9 8280
Selling
Commission 2.4 2880
Shipping (FOB factory items) 0.8 960
Total VC 30.34 36408
Contribution margin from special order 5.66 6792
Fixed cost increment
Extra cost 5400
Profit on special order 1392

B. Additional profit required to earn $3600 = $3600-$1392 = $2208

Additional price per unit to be charged = $2208/1200 =$1.84 per unit

Lowest price Glendale should receive = 36+1.84 = $37.84

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