Accept Business at Special Price Product A is normally sold for $50 per unit. A special price of $32 is offered for the export market. The variable production cost is $24 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 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 Reject Order (Alternative 1) Accept Order (Alternative 2) Differential Effect on Income (Alternative 2) Revenues, per unit $fill in the blank 3f481bf3bf97fe8_1 $fill in the blank 3f481bf3bf97fe8_2 $fill in the blank 3f481bf3bf97fe8_3 Costs: Variable manufacturing costs, per unit fill in the blank 3f481bf3bf97fe8_4 fill in the blank 3f481bf3bf97fe8_5 fill in the blank 3f481bf3bf97fe8_6 Export tariff, per unit fill in the blank 3f481bf3bf97fe8_7 fill in the blank 3f481bf3bf97fe8_8 fill in the blank 3f481bf3bf97fe8_9 Income (Loss), per unit $fill in the blank 3f481bf3bf97fe8_10 $fill in the blank 3f481bf3bf97fe8_11 $fill in the blank 3f481bf3bf97fe8_12 b. Should the special order be rejected (Alternative 1) or accepted (Alternative 2)?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Accept Business at Special Price

Product A is normally sold for $50 per unit. A special price of $32 is offered for the export market. The variable production cost is $24 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 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
	Reject Order (Alternative 1)	Accept Order (Alternative 2)	Differential Effect on Income (Alternative 2)
Revenues, per unit	$fill in the blank 3f481bf3bf97fe8_1	$fill in the blank 3f481bf3bf97fe8_2	$fill in the blank 3f481bf3bf97fe8_3
Costs:
Variable manufacturing costs, per unit	fill in the blank 3f481bf3bf97fe8_4	fill in the blank 3f481bf3bf97fe8_5	fill in the blank 3f481bf3bf97fe8_6
Export tariff, per unit	fill in the blank 3f481bf3bf97fe8_7	fill in the blank 3f481bf3bf97fe8_8	fill in the blank 3f481bf3bf97fe8_9
Income (Loss), per unit	$fill in the blank 3f481bf3bf97fe8_10	$fill in the blank 3f481bf3bf97fe8_11	$fill in the blank 3f481bf3bf97fe8_12

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

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