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Bates Golf Supply Produces a Golf Bag That Sells for $220.Although

Question 22

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Bates Golf Supply produces a golf bag that sells for $220.Although the company's production capacity is 5,000 bags per year,only 4,000 bags are currently being produced and sold.The production costs for 4,000 bags are as follows:  Unit-level material cost $300,000 Unit-level labor cost 240,000 Unit-level overhead 75,000 Batch-level setup costs ( 500 units per batch) 16,000 Product-level costs 20,000 Allocated facility-level costs 25,000\begin{array}{|l|r|}\hline \text { Unit-level material cost }& \$ \quad 300,000\\\hline \text { Unit-level labor cost } & 240,000 \\\hline \text { Unit-level overhead } & 75,000 \\\hline \text { Batch-level setup costs ( } 500 \text { units per batch) } & 16,000 \\\hline \text { Product-level costs } & 20,000 \\\hline \text { Allocated facility-level costs } & 25,000\\\hline\end{array} Golf Mart Stores has offered to purchase 1,000 golf bags as a one-time special purchase at a price of $170 per bag.
Required:
1)Prepare a quantitative analysis that indicates whether the special order should be accepted.
2)What qualitative factors should be considered in this special order decision?

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1)Evaluation of special order:
2)Qual...

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