Accept Business at Special Price Product D is normally sold for $42 per unit. A special price of $35 is offered for the export market. The variable production cost is $26 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 "O". 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 Accept Order Reject Order (Alternative 1) (Alternative 2) on Income (Alternative 2) 35 35 Revenues, per unit Costs: 26 X 26 X 26 Variable manufacturing costs, per unit X 5.60 5.60 Export tariff, per unit 3.40 3.40 Income (Loss), per unit X

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 D is normally sold for $42 per unit. A special price of $35 is offered for the export market. The variable production cost is $26 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 "O". 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
Accept Order
Reject Order
(Alternative 1) (Alternative 2)
on Income
(Alternative 2)
35
35
Revenues, per unit
Costs:
26 X
26 X
26
Variable manufacturing costs, per unit
X
5.60
5.60
Export tariff, per unit
3.40
3.40
Income (Loss), per unit
X
Transcribed Image Text:Accept Business at Special Price Product D is normally sold for $42 per unit. A special price of $35 is offered for the export market. The variable production cost is $26 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 "O". 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 Accept Order Reject Order (Alternative 1) (Alternative 2) on Income (Alternative 2) 35 35 Revenues, per unit Costs: 26 X 26 X 26 Variable manufacturing costs, per unit X 5.60 5.60 Export tariff, per unit 3.40 3.40 Income (Loss), per unit X
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