university of california Operations And Supply Chain Management Assignment Help - ACCT 2302

Question - Stein Company makes carpets. A customer wants to place a special order for 1,000 carpets in navy
blue with the company logo woven in the middle, to be priced at $30 each. Normally, Stein would
charge $60 per carpet for this type of order. Stein figures that yarn and backing will cost $12 per
carpet, variable overhead (machining, electricity) is $6 per carpet, direct labor is $10 per carpet, and
for one setup the labor will be required at $800 per setup. The set-up charge costs are 100% labor.
Currently, the workers needed to set up for and make the carpets are working at Stein. Their wages
will be paid whether or not the special order is accepted. Stein's policy is to avoid layoffs to the extent
possible.
Refer to Figure 12-1. If St ...Read More ein accepts the special order, by how much will operating income increase
or decrease?
a. $12,000 decrease
b. $12,000 increase
c. $2,000 decrease
d. $2,000 increase
e. there will be no effect on operating income ...Read Less

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