Maria's Food Service provides meals that nonprofit organizations distribute to handicapped and elderly people. The following is her forecasted income statement for April, when she expects to produce and sell 2,800 meals: Amount Per Unit $ 16,240 12,320 $ 3,920 2,240 $ 1,680 $ 5.80 Sales revenue Costs of meals produced Gross profit Administrative costs 4.40 $1.40 0.80 $0.60 Operating profit Fixed costs included in this income statement are $4.144 for meal production and $560 for administrative costs. Maria has received a special request from an organization sponsoring a picnic to raise funds for the Special Olympics. This organization is willing to pay $3.40 per meal for 300 meals on April 10. Maria has sufficient idle capacity to fill this special order. These meals will incur all of the variable costs of meals produced, but variable administrative costs and total fixed costs will not be affected. Required: a. What impact would accepting this special order have on operating profit? (Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) Status Quo 2,800 Units Alternative Difference 3,100 Units Sales revenue Variable costs: Meals Administrative Contribution margin Fixed costs Operating profit

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Maria's Food Service provides meals that nonprofit organizations distribute to handicapped and elderly people. 

Maria's Food Service provides meals that nonprofit organizations distribute to handicapped and elderly people. The following is her
forecasted income statement for April, when she expects to produce and sell 2,800 meals:
Amount
Per Unit
$ 16, 240
12, 320
$ 3,920
2, 240
$ 1,680
Sales revenue
$ 5.80
Costs of meals produced
Gross profit
Administrative costs
4.40
$ 1.40
0.80
$0.60
Operating profit
Fixed costs included in this income statement are $4.144 for meal production and $560 for administrative costs. Maria has received a
special request from an organization sponsoring a picnic to raise funds for the Special Olympics. This organization is willing to pay
$3.40 per meal for 300 meals on April 10. Maria has sufficient idle capacity to fill this special order. These meals will incur all of the
variable costs of meals produced, but variable administrative costs and total fixed costs will not be affected.
Required:
a. What impact would accepting this special order have on operating profit? (Select option "higher" or "lower", keeping Status Quo
as the base. Select "none" if there is no effect.)
Status Quo
2,800 Units
Alternative
Difference
3,100 Units
Sales revenue
Variable costs:
Meals
Administrative
Contribution margin
Fixed costs
Operating profit
Transcribed Image Text:Maria's Food Service provides meals that nonprofit organizations distribute to handicapped and elderly people. The following is her forecasted income statement for April, when she expects to produce and sell 2,800 meals: Amount Per Unit $ 16, 240 12, 320 $ 3,920 2, 240 $ 1,680 Sales revenue $ 5.80 Costs of meals produced Gross profit Administrative costs 4.40 $ 1.40 0.80 $0.60 Operating profit Fixed costs included in this income statement are $4.144 for meal production and $560 for administrative costs. Maria has received a special request from an organization sponsoring a picnic to raise funds for the Special Olympics. This organization is willing to pay $3.40 per meal for 300 meals on April 10. Maria has sufficient idle capacity to fill this special order. These meals will incur all of the variable costs of meals produced, but variable administrative costs and total fixed costs will not be affected. Required: a. What impact would accepting this special order have on operating profit? (Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) Status Quo 2,800 Units Alternative Difference 3,100 Units Sales revenue Variable costs: Meals Administrative Contribution margin Fixed costs Operating profit
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