A Customer Has Asked Balkans Corporation to Supply 5,000 Units

question 11

Essay

A customer has asked Balkans Corporation to supply 5,000 units of product DX9,with some modifications,for $40.20 each.The normal selling price of this product is $52.80 each.The normal unit product cost of product DX9 is computed as follows:
Direct labor is a variable cost.The special order would have no effect on the company's total fixed manufacturing overhead costs.The customer would like some modifications made to product DX9 that would increase the variable costs by $3.50 per unit and that would require a one-time investment of $23,000 in special molds that would have no salvage value.This special order would have no effect on the company's other sales.The company has ample capacity for producing the special order.Required:
Determine the effect on the company's total net operating income of accepting the special order.Show your work!
$$\begin{array} { | l | r | } \hline \text { Direct materials } & \$ 12.70 \\\hline \text { Direct labor } & 6.10 \\\hline \text { Variable manufacturing overhead } & 8.70 \\\hline \text { Fixed manufacturing overhead } & \underline { 7.70 } \\\hline \text { Unit product cost } & \$ 35.20 \\\hline\end{array}$$

Explain the mediation process, the role of mediators, and the benefits of mediation's nonadversarial nature.

Understand the concept of game theory and its applications.

Identify dominant strategies in various game setups.

Recognize conditions for Nash equilibria in pure and mixed strategies.

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Definitions:

Quality of Conformance

The degree to which a product or service meets the specified design or specifications and quality standards during the manufacturing or delivery process.

Excellence

The quality of being outstanding or extremely good in performance or quality.

Activity-Based Costing

A costing methodology that assigns costs to products or services based on the resources they consume, aiming to provide more accurate information on the profitability of each product or service.

Traditional Volume-Based

A costing method that allocates overhead based on a single volume-based cost driver, such as direct labor hours or machine hours, potentially leading to inaccurate product costs.