Nilai University/Academic/Set 1 Page 1 of 6 QUESTION 2 (20 MARKS) Jens Sporting Goods, Incorporation, manufactures a com

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Nilai University Academic Set 1 Page 1 Of 6 Question 2 20 Marks Jens Sporting Goods Incorporation Manufactures A Com 1 (75.65 KiB) Viewed 25 times

Nilai University/Academic/Set 1 Page 1 of 6 QUESTION 2 (20 MARKS) Jens Sporting Goods, Incorporation, manufactures a complete line of sporting equipment. Leiden Enterprises operates a large chain of discount stores. Leiden has approached Jens with a special order for 30,000 deluxe baseballs. Instead of being packaged separately, the balls are to be packed in boxes containing 500 baseballs each. Leiden is willing to pay £2.45 per baseball. Jens knows that annual expected production is 400,000 baseballs. It also knows that the current year's production is 410,000 baseballs and that the maximum production capacity is 450.000 baseballs. The following additional information is available: Standard unit cost data for 400,000 baseballs 0.90 0.60 Direct materials Direct labour Overhead: Variable Fixed (£100,000/400,000) Packaging per unit Advertising ($600,000/400,000) Other fixed selling and administrative expenses (120,000/400,000) Production unit cost Unit selling price Total estimated bulk packaging cost for special order (30,000 baseballs:500 per box) 0.50 0.25 0.30 0.15 0.30 3.00 4.00 2500 Required: a. Prepare a statement to determine whether the company should accept the special order. Support your solutions with computation workings. [16 MARKS] b. What should be the minimum order price per baseball if Jens would like to earn a profit of 3,000 from the special order? [4 MARKS]