Imperial Jewelers is considering a special order for 12 handcrafted gold bracelets to be given as gifts to members of a wedding party. The normal selling price of a gold bracelet is $410.00 and its unit product cost is $261.00 as shown below: Direct materials Direct labor Manufacturing overhead $143 83 35 Unit product cost $ 261 Most of the manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $12
![Exercise 10-4 Evaluating a Special Order [LO10-4] Imperial Jewelers is considering a special order for 12 handcrafted gold bracelets to be given as gifts to members of a wedding party. The normal selling price of a gold bracelet is $410.00 and its unit product cost is $261.00 as shown below: Direct materials Direct labor Manufacturing overhead $143 83 35 Unit product cost $ 261 Most of the manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $12 of the overhead is variable with respect to the number of bracelets produced. The customer who is interested in the special bracelet order would like special filigree applied to the bracelets. This filigree would require additional materials costing $11 per bracelet and would also require acquisition of a special tool costing $456 that would have no other use once the special order is completed. This order would have no effect on the companys regular sales and the order could be fulfilled using the companys existing capacity without affecting any other order.](http://d2vlcm61l7u1fs.cloudfront.net/media%2F3f7%2F3f77db9c-ec59-42a6-8399-69b29c9fbfa9%2Fphp5DKn63.png)
