Nardin Outfitters has a capacity to produce 20,500 of their special arctic tents per year. The company is currently producing and selling 5,000 tents per year at a selling price of $1,750 per tent. The cost of producing and selling one tent follows: Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative costs Fixed selling and administrative costs Total costs The company has received a special order for 2,200 tents at a price of $770 per tent from Chipman Outdoor Center. It will not have to pay any sales commission on the special order, so the variable selling and administrative costs would be only $62 per tent. The special order would have no effect on total fixed costs. The company has rejected the offer based on the following computations: Selling price per case Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative costs Fixed selling and administrative costs Net profit (loss) per case $ 610 175 165 135 $ 1,085 $ 770 610 Required A Required B 175 62 135 $ (212) Required: a. What is the impact on profit for the year if Nardin Outfitters accepts the special order? b. Do you agree with the decision to reject the special order? Complete this question by entering your answers in the tabs below.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

please answer both parts  complete and correct with working please answer in text thanks 

 

Nardin Outfitters has a capacity to produce 20,500 of their special arctic tents per year. The company is currently producing and
selling 5,000 tents per year at a selling price of $1,750 per tent. The cost of producing and selling one tent follows:
Variable manufacturing costs
Fixed manufacturing costs
Variable selling and administrative costs
Fixed selling and administrative costs
Total costs
The company has received a special order for 2,200 tents at a price of $770 per tent from Chipman Outdoor Center. It will not have to
pay any sales commission on the special order, so the variable selling and administrative costs would be only $62 per tent. The special
order would have no effect on total fixed costs. The company has rejected the offer based on the following computations:
Selling price per case
Variable manufacturing costs
Fixed manufacturing costs
Variable selling and administrative costs
Fixed selling and administrative costs
Net profit (loss) per case
$ 610
175
165
135
$ 1,085
Required:
a. What is the impact on profit for the year if Nardin Outfitters accepts the special order?
b. Do you agree with the decision to reject the special order?
Complete this question by entering your answers in the tabs below.
Required A
$ 770
610
175
62
135
$ (212)
Required B
What is the impact on profit for the year if Nardin Outfitters accepts the special order? (Enter your answers in thousands
rounded to 1 decimal place. (i.e., 5,400,400 should be entered as 5,400.4). Select option "higher" or "lower", keeping Status
Quo as the base. Select "none" if there is no effect.)
Sales revenue
Variable costs:
Manufacturing
Selling and administrative
(All revenues and costs in $000)
Status Quo
Alternative
5000 Units
7200 Units
Difference
Transcribed Image Text:Nardin Outfitters has a capacity to produce 20,500 of their special arctic tents per year. The company is currently producing and selling 5,000 tents per year at a selling price of $1,750 per tent. The cost of producing and selling one tent follows: Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative costs Fixed selling and administrative costs Total costs The company has received a special order for 2,200 tents at a price of $770 per tent from Chipman Outdoor Center. It will not have to pay any sales commission on the special order, so the variable selling and administrative costs would be only $62 per tent. The special order would have no effect on total fixed costs. The company has rejected the offer based on the following computations: Selling price per case Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative costs Fixed selling and administrative costs Net profit (loss) per case $ 610 175 165 135 $ 1,085 Required: a. What is the impact on profit for the year if Nardin Outfitters accepts the special order? b. Do you agree with the decision to reject the special order? Complete this question by entering your answers in the tabs below. Required A $ 770 610 175 62 135 $ (212) Required B What is the impact on profit for the year if Nardin Outfitters accepts the special order? (Enter your answers in thousands rounded to 1 decimal place. (i.e., 5,400,400 should be entered as 5,400.4). Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) Sales revenue Variable costs: Manufacturing Selling and administrative (All revenues and costs in $000) Status Quo Alternative 5000 Units 7200 Units Difference
Net profit (loss) per case
Required:
a. What is the impact on profit for the year if Nardin Outfitters accepts the special order?
b. Do you agree with the decision to reject the special order?
Complete this question by entering your answers in the tabs below.
Required A
Required B
What is the impact on profit for the year if Nardin Outfitters accepts the special order? (Enter your answers in thousands
rounded to 1 decimal place. (i.e., 5,400,400 should be entered as 5,400.4). Select option "higher" or "lower", keeping Status
Quo as the base. Select "none" if there is no effect.)
Sales revenue
Variable costs:
$ (212)
Manufacturing
Selling and administrative
Contribution margin
Fixed costs
Operating profit
(All revenues and costs in $000)
Status Quo
Alternative
7200 Units
5000 Units
< Required A
Required A
Required B
Do you agree with the decision to reject the special order?
Do you agree with the decision to reject the special order?
< Required A
Difference
Required B >
Required:
a. What is the impact on profit for the year if Nardin Outfitters accepts the special order?
b. Do you agree with the decision to reject the special order?
Complete this question by entering your answers in the tabs below.
Required B >
Transcribed Image Text:Net profit (loss) per case Required: a. What is the impact on profit for the year if Nardin Outfitters accepts the special order? b. Do you agree with the decision to reject the special order? Complete this question by entering your answers in the tabs below. Required A Required B What is the impact on profit for the year if Nardin Outfitters accepts the special order? (Enter your answers in thousands rounded to 1 decimal place. (i.e., 5,400,400 should be entered as 5,400.4). Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) Sales revenue Variable costs: $ (212) Manufacturing Selling and administrative Contribution margin Fixed costs Operating profit (All revenues and costs in $000) Status Quo Alternative 7200 Units 5000 Units < Required A Required A Required B Do you agree with the decision to reject the special order? Do you agree with the decision to reject the special order? < Required A Difference Required B > Required: a. What is the impact on profit for the year if Nardin Outfitters accepts the special order? b. Do you agree with the decision to reject the special order? Complete this question by entering your answers in the tabs below. Required B >
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 2 images

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education