Special OrderPlastic Pipe Company manufactures a variety of pipes, and has received a special one-time-only order from a new customer. Plastic Pipe has sufficient idle capacity to accept the special order tomanufacture 1,200 16-foot lengths of pipe at a price of $11.00 per pipe. Plastic Pipe's normal selling price is $12.00 per 16-foot length. Variable manufacturing costs are $7.00 per pipe and fixedmanufacturing costs are $1.00 per pipe. Plastic Pipe's variable selling expense for its normal line of pipes is $0.50 per pipe.What would the effect on Plastic Pipe's operating income be if the company accepted the special order?Plastic Pipe's operating income would increase ♦ by $4,200Xif the order was accepted.

Additional sales revenue (1200*$11) $13,200 Less : Variable manufacturing cost (1200*$7) ($8400)…

Answered: e $1.00 per pipe. Plastic Pipe's…

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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Stryker Industries received an offer from an exporter for 15,000 units of product at $17.50 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price $20 Unit manufacturing costs: Variable Fixed 11 1 The differential revenue from the acceptance of the offer is Oa. $300,000 Ob. $262,500 Oc. $250,000 Od. $52,500
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Sh17
Jacoby Company received an offer from an exporter for 26,200 units of product at $19 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price $24 Unit manufacturing costs: Variable Fixed 10 d. $131,000 3 The differential revenue from the acceptance of the offer is O a. $628,800 O b. $497,800 Oc. $1,126,600 O
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Accept Business at Special Price Product A is normally sold for $47 per unit. A special price of $30 is offered for the export market. The variable production cost is $25 per unit. An additional export tariff of 16% 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". Differential Analysis Reject Order (Alt. 1) or Accept Order (Alt. 2) March 16 Reject Acсept Differential Order Order Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues, per unit Costs: Variable manufacturing costs, per unit Export tariff, per unit Profit (loss), per unit $ b. Should the special order be rejected (Alternative 1) or accepted (Alternative 2)?
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e $1.00 per pipe. Plastic Pipe's variable selling expense for its normal line o on Plastic Pipe's operating income be if the company accepted the special o income would increase by $4,200 xif the order was acc