Backyard Living Sells Its Barbecue Sets for $170 Each * $ 1,800,000 / 75,000 Units
Backyard Living Has Enough

question 94

Essay

Backyard Living sells its barbecue sets for $170 each.Suppose the company incurs the following average cost per barbecue set:
$$\begin{array} { l l } \text { Direct materials } & \$ 52 \\\text { Direct labor } & 28 \\\text { Variable manufacturing overhead } & 11 \\\text { Variable selling expenses } & 5 \\\text { Fixed manufarturing overhead* } &\underline{24 }\\\text { Total cost } & \underline{\$ 120}\end{array}$$ * $ 1,800,000 / 75,000 units
Backyard Living has enough idle capacity to accept a one-time-only special order from Superstore,Inc.for 2,000 barbecue sets at a sales price of $130 per set.Backyard Living will not incur $2 of variable selling expenses for this order.
How would accepting the order affect Backyard Living's operating income?

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Definitions:

Inductive Destabilization

The destabilization of a molecule due to the transmission of charge through bonds, typically affecting reactivity and stability.

Resonance

A concept in chemistry where a molecule is represented by two or more structures to depict its electron distribution more accurately.

Friedel-Crafts Alkylation

A chemical reaction process that introduces an alkyl group into an aromatic ring, typically using an alkyl halide and a strong Lewis acid catalyst.

Limitations

Refers to the restrictions or constraints that may hinder progress or achievement in a certain context or system.