Metlock Inc. manufactures two electronic products, widgets and gadgets, and has a capacity of 1,400...
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Accounting
Metlock Inc. manufactures two electronic products, widgets and gadgets, and has a capacity of 1,400 machine hours. Prices and costs for each product are as follows:
Widget
Gadget
Selling price per unit
$ 254
$ 334
Variable costs per unit
Direct materials
34
39
Other direct costs
14
16
Variable Manufacturing overhead costs*
34
48
* Variable manufacturing overhead costs are applied at a rate of $ 44 per machine hour. Marx Industries, a potential client, has offered $ 254 per unit to Metlock for 254 special units. These 254 units would incur the following production costs and time:
Direct materials
$ 8,368
Other direct costs
$ 3,400
Machine hours
229
(a)
Assume that Metlock has enough excess capacity to produce the special order. Calculate what the total contribution would be if the special order from Marx were accepted.
Total contribution margin
$ enter the total contribution margin in dollars
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