Accept Business at Special Price Product A is normally sold for 12% of revenue m
ID: 2584329 • Letter: A
Question
Accept Business at Special Price Product A is normally sold for 12% of revenue must be paid for all export products. Assume there is sufficient capacity for the special order. 34 is offered for the export market. The variable production cost is $26 per unit. An aditional export tarnlf of a. Prepare a differential analysis dated March 16 on whether to reject (Alt decimal places. If an amount is zero, enter zero "0. For those boxes in which you must enter ernative 1) or accept (Alternative 2) the special order. If required, round your answers to two subtracted or negative numbers use a minus sign Differential Analysis Reject Order (Alt. 1) or Accept Order (Alt.2) 16 Reject Order (Alternative 1) Accept Order (Alternative 2) Differential Effect on Income (Alternative 2) Costs: Export tariff, per unit b. Should the special order be rejected (Alternative 1) or accepted (Alternative 2)?Explanation / Answer
Alternative 1 Alternative 2 Differencial effect Revenue per unit 44 34 78 Costs Variable manufacturing cost per unit 26 26 52 Export tarrif per unit 0 4.08 4.08 Income (loss) per unit 18 3.92 21.92 Order should be accepted