80.2K

Verified Solution

Link Copied!

Wilson Cullumber is a leading producer of vinyl replacement windows. The companys growth strategy focuses on developing domestic markets in large metropolitan areas. The company operates a single manufacturing plant in Kansas City with an annual capacity of 500,000 windows. Current production is budgeted at 450,000 windows per year, a quantity that has been constant over the past three years. Based on the budget, the accounting department has calculated the following unit costs for the windows:

Direct materials		$50.00
Direct labor		25.00
Manufacturing overhead		16.00
Selling and administrative		14.00
Total unit cost		$105.00

The companys budget includes $5,400,000 in fixed overhead and $3,150,000 in fixed selling and administrative expenses. The windows sell for $150.00 each. A 2% distributors commission is included in the selling and administrative expenses.

A2)Bramble, Finlands second largest homebuilder, has approached Wilson with an offer to buy 75,000 windows during the coming year. Given the size of the order, Bramble has requested a 30% volume discount on Wilsons normal selling price. Calculate the contribution from special order. (If net contribution is negative, enter amount with a negative sign, e.g. -5,285 or parentheses, e.g. (5,285). Round answer to 0 decimal places, e.g. 8,971.)

Net contribution from special order

$enter the net contribution from special order in dollars rounded to 0 decimal places

Should Wilson grant Bramble s request?

Answer & Explanation Solved by verified expert

See Answer