Business, 05.05.2020 05:08 nicolasjarrin
Bramble Company is a leading manufacturer of sunglasses. One of Bramble’s products protects the eyes from ultraviolet rays. An upscale sporting goods store has contacted Bramble about purchasing 16,500 pairs of these sunglasses. Bramble’s unit manufacturing cost, based on a full capacity of 109,000 units, is as follows: Direct materials $6 Direct labor 5 Manufacturing overhead (60% fixed) 20 Total manufacturing costs $31 Bramble also incurs selling and administrative expenses of $75,770 plus $2 per pair for sales commissions. The company has plenty of excess manufacturing capacity to use in manufacturing the sunglasses. Bramble’s normal price for these sunglasses is $40 per pair. The sporting goods store has offered to pay $36 per pair. Since the special order was initiated by the sporting goods store, no sales commission will be paid. What would be the effect on Bramble’s income if the special order were accepted?
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Bramble Company is a leading manufacturer of sunglasses. One of Bramble’s products protects the eyes...
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