Product A is normally sold for $49 per unit. A special price of $31 is offered for the export market. The variable production cost is $22 per unit. An additional export tariff of 15% of revenue must be paid for all export products. Assume there is sufficient capacity for the special order. a. Prepare 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 "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Reject Order (Alt. 1) or Accept Order (Alt. 2) March 16 Reject Order (Alternative 1) Accept Order (Alternative 2) Differential Effect on Income (Alternative 2) Revenues, per unit $fill in the blank ff686a03d067fb0_1 $fill in the blank ff686a03d067fb0_2 $fill in the blank ff686a03d067fb0_3 Costs: Variable manufacturing costs, per unit fill in the blank ff686a03d067fb0_4 fill in the blank ff686a03d067fb0_5 fill in the blank ff686a03d067fb0_6 Export tariff, per unit fill in the blank ff686a03d067fb0_7 fill in the blank ff686a03d067fb0_8 fill in the blank ff686a03d067fb0_9 Income (Loss), per unit $fill in the blank ff686a03d067fb0_10 $fill in the blank ff686a03d067fb0_11 $fill in the blank ff686a03d067fb0_12 b. Should the special order be rejected (Alternative 1) or accepted (Alternative 2)?

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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Accept Business at Special Price

Product A is normally sold for $49 per unit. A special price of $31 is offered for the export market. The variable production cost is $22 per unit. An additional export tariff of 15% of revenue must be paid for all export products. Assume there is sufficient capacity for the special order.

a. Prepare 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 "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Differential Analysis
Reject Order (Alt. 1) or Accept Order (Alt. 2)
March 16
	Reject Order (Alternative 1)	Accept Order (Alternative 2)	Differential Effect on Income (Alternative 2)
Revenues, per unit	$fill in the blank ff686a03d067fb0_1	$fill in the blank ff686a03d067fb0_2	$fill in the blank ff686a03d067fb0_3
Costs:
Variable manufacturing costs, per unit	fill in the blank ff686a03d067fb0_4	fill in the blank ff686a03d067fb0_5	fill in the blank ff686a03d067fb0_6
Export tariff, per unit	fill in the blank ff686a03d067fb0_7	fill in the blank ff686a03d067fb0_8	fill in the blank ff686a03d067fb0_9
Income (Loss), per unit	$fill in the blank ff686a03d067fb0_10	$fill in the blank ff686a03d067fb0_11	$fill in the blank ff686a03d067fb0_12

b. Should the special order be rejected (Alternative 1) or accepted (Alternative 2)?

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