question archive Ironwood Company manufactures a variety of sunglasses
Ironwood Company manufactures a variety of sunglasses
Subject:AccountingPrice: Bought3
Ironwood Company manufactures a variety of sunglasses. Production information for its most popular line, the Clear Vista (CV), follows: Per Unit Sales price 57.50 Direct materials 26.00 Direct labor 10.00 Variable manufacturing overhead 2.00 Fixed manufacturing overhead 5.00 Total manufacturing cost 43.00 Suppose that Ironwood has been approached about producing a special order for 3.400 units of custom CV sunglasses for a new semiprofessional volleyball league. All units in the special order would be produced in the league's signature colors with a specially designed logo emblem attached to the side of the glasses. The league has ofered to pay $55.00 per unit in the special order Additional costs for the special order total $6.00 per unit for mixing the special frame color and purchasing the emblem with the league's logo that will be attached to the glasses. Required: 1. Assume Ironwood has the idle capacity necessary to accommodate the special order. Calculate the additional contribution margin lronwood would make by accepting the special order dditional CM 2-a. Calculate the current contribution margin per unit.
