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Special Order Carson Manufacturing, Inc., sells a single product for $37 per unit. At an operating level of 8,000 units, variable costs are $18 per unit and fixed costs $10 per unit. Carson has been offered a price of $21 per unit on a special order of 2,000 units by Big Mart Discount Stores, which would use its own brand name on the item. If Carson accepts the order, material cost will be $4 less per unit than for regular production. However, special stamping equipment costing $5,000 would be needed to process the order; the equipment would then be discarded. Assuming that volume remains within the relevant range, prepare an analysis of differential revenue and costs to determine whether Carson should accept the special order. Use a negative sign with answer to only indicate a loss from special order; otherwise do not use negative signs with your answers. Special Order Differential Analysis Differential revenue Differential variable costs Equipment cost Additional income (loss) from special order $ 0 x

Special Order Carson Manufacturing, Inc., sells a single product for $37 per unit. At an operating level of 8,000 units, variable costs are $18 per unit and fixed costs $10 per unit. Carson has been offered a price of $21 per unit on a special order of 2,000 units by Big Mart Discount Stores, which would use its own brand name on the item. If Carson accepts the order, material cost will be $4 less per unit than for regular production. However, special stamping equipment costing $5,000 would be needed to process the order; the equipment would then be discarded. Assuming that volume remains within the relevant range, prepare an analysis of differential revenue and costs to determine whether Carson should accept the special order. Use a negative sign with answer to only indicate a loss from special order; otherwise do not use negative signs with your answers. Special Order Differential Analysis Differential revenue Differential variable costs Equipment cost Additional income (loss) from special order $ 0 x

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 6EB: Kerr Manufacturing sells a single product with a selling price of $600 with variable costs per unit...
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Special Order Carson Manufacturing, Inc., sells a single product for $37 per unit. At an operating level of 8,000 units, variable costs are $18 per unit and fixed costs $10 per unit. Carson has been offered a price of $21 per unit on a special order of 2,000 units by Big Mart Discount Stores, which would use its own brand name on the item. If Carson accepts the order, material cost will be $4 less per unit than for regular production. However, special stamping equipment costing $5,000 would be needed to process the order; the equipment would then be discarded. Assuming that volume remains within the relevant range, prepare an analysis of differential revenue and costs to determine whether Carson should accept the special order. Use a negative sign with answer to only indicate a loss from special order; otherwise do not use negative signs with your answers. Special Order Differential Analysis Differential revenue Differential variable costs Equipment cost Additional income (loss) from special order $ 0 x
Transcribed Image Text:Special Order Carson Manufacturing, Inc., sells a single product for $37 per unit. At an operating level of 8,000 units, variable costs are $18 per unit and fixed costs $10 per unit. Carson has been offered a price of $21 per unit on a special order of 2,000 units by Big Mart Discount Stores, which would use its own brand name on the item. If Carson accepts the order, material cost will be $4 less per unit than for regular production. However, special stamping equipment costing $5,000 would be needed to process the order; the equipment would then be discarded. Assuming that volume remains within the relevant range, prepare an analysis of differential revenue and costs to determine whether Carson should accept the special order. Use a negative sign with answer to only indicate a loss from special order; otherwise do not use negative signs with your answers. Special Order Differential Analysis Differential revenue Differential variable costs Equipment cost Additional income (loss) from special order $ 0 x
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