Burke offers to pay Ryan $10.75 per unit for an order of 8,000 units. Ryan has the capacity to fill the order and accepting the order will not affect any other orders. Should Ryan accept this special order? Show your analysis.
Job FWS consists of 40 units and will require 15 setups, 200 machine hours, and 60 inspections. Using ABC what amount of manufacturing overhead will be allocated to job FWS? What amount would McCallum allocate to job FWS using their current traditional system?
See attached file for full problem description.
This solution looks at two problems: a special order problem and a job costing problem.