Stangle Company Manufactures Ties The Ties Normally Sell for $22 Each

question 100

Essay

Stangle Company manufactures ties.When 28,000 ties are produced,the costs per unit are:
$\begin{array} { l } \text {Direct materials }&\$0.60 \\ \text {Direct manufacturing labor }&\$ 3.00 \\ \text {Variable manufacturing overhead }&\$ 1.20 \\ \text {ixed manufacturing overhead }&\$1.60 \\ \text {Variable selling }&\$ 0.80 \\ \text { Fixed selling}&\$ 1.13 \\\end{array}$

The ties normally sell for $22 each.The company has received a special order for 2,000 ties at $8.00 per tie.The company will incur an additional variable selling cost of $1.50 per unit with the special order.The company has excess capacity.
Required:
Compute the amount by which the operating income would change if the order were accepted.

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Definitions:

Analog-Tag

A label or identifier for analog signals in a system, which represent a range of values, not just binary, to control or monitor devices.

Alias-Tag

A secondary name assigned to a tag or variable in programming environments like PLCs, allowing for easier identification or referencing.

Foreshortening

A technique used in visual art to create the illusion of an object receding strongly into the background or coming forward in space.

Chiaroscuro

In drawing or painting, the treatment and use of light and dark, especially the gradations of light that produce the effect of modeling.