Blue Manufacturing Company has a normal production capacity of 41,600 units per month. Because of an excess amount of inventory on hand, it expects to produce only 31,800 units in July. Monthly fixed costs and expenses are $124,800 ($3 per unit at normal plant capacity) and variable costs and expenses are $8.00 per unit. The present selling price is $13.00 per unit. The company has an opportunity to sell 9,400 additional units at $9 per unit to a company who plans to market the product under its own brand name in a foreign market. The additional business will not affect the regular selling price or quantity of sales of Blue Manufacturing Company. Prepare a differential analysis for the proposal to sell at the special price. ✓ Additional shipping costs Differential cost of accepting offer Differential income from accepting offer Differential loss from accepting offer Differential revenue from accepting offer Revenue from sale Variable costs and expenses $ $
Blue Manufacturing Company has a normal production capacity of 41,600 units per month. Because of an excess amount of inventory on hand, it expects to produce only 31,800 units in July. Monthly fixed costs and expenses are $124,800 ($3 per unit at normal plant capacity) and variable costs and expenses are $8.00 per unit. The present selling price is $13.00 per unit. The company has an opportunity to sell 9,400 additional units at $9 per unit to a company who plans to market the product under its own brand name in a foreign market. The additional business will not affect the regular selling price or quantity of sales of Blue Manufacturing Company. Prepare a differential analysis for the proposal to sell at the special price. ✓ Additional shipping costs Differential cost of accepting offer Differential income from accepting offer Differential loss from accepting offer Differential revenue from accepting offer Revenue from sale Variable costs and expenses $ $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Blue Manufacturing Company has a normal production capacity of 41,600 units per month. Because of an excess amount of inventory
on hand, it expects to produce only 31,800 units in July. Monthly fixed costs and expenses are $124,800 ($3 per unit at normal plant
capacity) and variable costs and expenses are $8.00 per unit. The present selling price is $13.00 per unit. The company has an
opportunity to sell 9,400 additional units at $9 per unit to a company who plans to market the product under its own brand name in a
foreign market. The additional business will not affect the regular selling price or quantity of sales of Blue Manufacturing Company.
Prepare a differential analysis for the proposal to sell at the special price.
Additional shipping costs
Differential cost of accepting offer
Differential income from accepting offer
Differential loss from accepting offer
Differential revenue from accepting offer
Revenue from sale
Variable costs and expenses
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