Bundle: Accounting, Chapters 1-13, 26th + Working Papers, Chapters 1-17 For Warren/reeve/duchac's Accounting, 26th And Financial Accounting, 14th + ... For Warren/reeve/duchac's Accounting, 26th
26th Edition
ISBN: 9781337498159
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 25, Problem 25.6BPE
To determine
Differential Analysis: Differential analysis refers to the analysis of differential revenue that could be gained or differential cost that could be incurred from the available alternative options of business.
To Prepare: The differential analysis to decide whether to reject or accept the special order.
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Accept Business at Special Price
Product D is normally sold for $43 per unit. A special price of $32 is offered for the export market. The variable production cost is $23 per unit. An additional
export tariff of 16% of revenue must be paid for all export products. Assume that there is sufficient capacity for the special order.
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
Differential Effect
on Income
(Alternative 2)
Reject Order
(Alternative 1) (Alternative 2)
Accept Order
Revenues, per unit
Costs:
Variable manufacturing costs, per unit
Export tariff, per unit
Reject the special order
Accept the special order
be rejected (Alternative 1) or accepted…
Accept Business at Special Price
Product N is normally sold for $21.40 per unit. A special price of $16.10 is offered for the export market. The variable production cost is $11.20 per unit.
An additional export tariff of 20% of revenue must be paid for all export products. Assume that there is sufficient capacity for the special order.
Prepare a differential analysis dated March 16 on whether to Reject Order (Alternative 1) or Accept Order (Alternative 2). 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
Аcсept
Differential
Order
Order
Effect
(Alternative 1) (Alternative 2) (Alternative 2)
Revenues, per unit
Costs:
Variable manufacturing costs, per unit
Export tariff, per unit
Profit (loss), per unit
Should the special order be rejected (Alternative 1) or accepted (Alternative 2)?
Accept Business at Special Price
Product N is normally sold for $42 per unit. A special price of $33 is offered for the export market. The variable production cost is $23 per unit. An additional export tariff of 16% of revenue must be paid for all export products. Assume that there is sufficient capacity for the special order.
Prepare a differential analysis dated March 16 on whether to Reject Order (Alternative 1) or Accept Order (Alternative 2). 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
RejectOrder(Alternative 1)
AcceptOrder(Alternative 2)
DifferentialEffects(Alternative 2)
Revenues, per unit
$fill in the blank
$fill in the blank
$fill in the blank
Costs:
Variable manufacturing costs, per unit
fill in the blank
fill in the blank
fill in the blank…
Chapter 25 Solutions
Bundle: Accounting, Chapters 1-13, 26th + Working Papers, Chapters 1-17 For Warren/reeve/duchac's Accounting, 26th And Financial Accounting, 14th + ... For Warren/reeve/duchac's Accounting, 26th
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