Product A is normally sold for $9.60 per unit. A special price of $7.20 is offered for the export market. The variable production cost is $5.00 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. Round your answers to two decimal places. If an amount is zero, enter "0". Differential Analysis Reject Order (Alt. 1) or Accept Order (Alt. 2) March 16   Reject Order (Alternative 1) Accept Order (Alternative 2) Differential Effects (Alternative 2) Revenues, per unit       Costs:       Variable manufacturing costs, per unit       Export tariff, per unit       Profit (loss), per unit       b. Should the special order be rejected (Alternative 1) or accepted (Alternative 2)?

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Chapter1: Financial Statements And Business Decisions
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Accept Business at Special Price

Product A is normally sold for $9.60 per unit. A special price of $7.20 is offered for the export market. The variable production cost is $5.00 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. Round your answers to two decimal places. If an amount is zero, enter "0".

Differential Analysis
Reject Order (Alt. 1) or Accept Order (Alt. 2)
March 16
  Reject
Order
(Alternative 1)
Accept
Order
(Alternative 2)
Differential
Effects
(Alternative 2)
Revenues, per unit      
Costs:      
Variable manufacturing costs, per unit      
Export tariff, per unit      
Profit (loss), per unit      

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

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