Accept Business at Special PriceProduct D is normally sold for $42 per unit. A special price of $35 is offered for the export market. The variable production cost is $26 perunit. An additional export tariff of 16% of revenue must be paid for all export products. Assume that there is sufficient capacity for thespecial orderPrepare a differential analysis dated March 16, on whether to reject (Alternative 1) or accept (Alternative 2) the special order. If required,round your answers to two decimal places. If an amount is zero, enter "O". For those boxes in which you must enter subtracted or negativenumbers use a minus signDifferential AnalysisReject Order (Alt. 1) or Accept Order (Alt. 2)March 16Differential EffectAccept OrderReject Order(Alternative 1) (Alternative 2)on Income(Alternative 2)3535Revenues, per unitCosts:26 X26 X26Variable manufacturing costs, per unitX5.605.60Export tariff, per unit3.403.40Income (Loss), per unitX

Calculate export tariff:Export tariff = $35*16%Export tariff = $5.60

Answered: Accept Business at Special Price…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 6BE

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