Accept Business at Special Price A product is normally sold for $42 per unit. A special price of $30 is offered for the export market. The variable production cost is $23 per unit. An additional export tariff of 13% of revenue must be paid for all export products. Assume there is sufficient capacity for the special order. a. Prepare a differential analysis dated December 15 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". Line Item Description Revenues, per unit Costs: www Differential Analysis Reject (Alt. 1) or Accept (Alt. 2) Order December 15 Variable manufacturing costs, per unit Export tariff, per unit Profit (loss), per unit Reject Accept Order Differential Effects Order (Alternative 1) (Alternative 2) (Alternative 2) DOD DU b. Should the special order be rejected (Alternative 1) or accepted (Alternative 2)?
Accept Business at Special Price A product is normally sold for $42 per unit. A special price of $30 is offered for the export market. The variable production cost is $23 per unit. An additional export tariff of 13% of revenue must be paid for all export products. Assume there is sufficient capacity for the special order. a. Prepare a differential analysis dated December 15 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". Line Item Description Revenues, per unit Costs: www Differential Analysis Reject (Alt. 1) or Accept (Alt. 2) Order December 15 Variable manufacturing costs, per unit Export tariff, per unit Profit (loss), per unit Reject Accept Order Differential Effects Order (Alternative 1) (Alternative 2) (Alternative 2) DOD DU b. Should the special order be rejected (Alternative 1) or accepted (Alternative 2)?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Accept Business at Special Price
A product is normally sold for $42 per unit. A special price of $30 is offered for the export market. The variable production cost is $23 per unit. An additional export tariff of 13% of revenue must be paid for all
export products. Assume there is sufficient capacity for the special order.
a. Prepare a differential analysis dated December 15 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".
Line Item Description
Revenues, per unit
Costs:
Differential Analysis
Reject (Alt. 1) or Accept (Alt. 2) Order
December 15
Variable manufacturing costs, per unit
Export tariff, per unit
Profit (loss), per unit
Differential
Effects
(Alternative 1) (Alternative 2) (Alternative 2)
Reject
Order
Accept
Order
DU
b. Should the special order be rejected (Alternative 1) or accepted (Alternative 2)?
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