(Solved):Hampton Company manufactures and sells medals for winners of athletic events. The company…

 

Question

Hampton Company manufactures and sells medals for winners of athletic events. The company normally charges $33 per medal. The average costs for a medal is shown below.

Direct materials: $12
Direct labor: 8
Variable manufacturing overhead: 6
Variable marketing expenses: 2
Fixed manufacturing overhead: 10 ($500,000 fixed manufacturing overhead/50,000 medals)
Total costs: $38

Hampton Company has enough idle capacity to accept a one-time only special order for 5,000 medals at $25 per

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