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)?
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)?
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 $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 |
|||
| Export tariff, per unit | |||
b. Should the special order be rejected (Alternative 1) or accepted (Alternative 2)?
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