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Nardin Outfitters has a capacity to produce 21,000 of their special arctic tents per year. The company is currently producing and selling 5,000 tents per year at a selling price of $1,800 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 2,300 tents at a price of $780 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 $63 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 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? Required A Complete this question by entering your answers in the tabs below. $ 620 180 170 140 $ 1,110 Required B Sales revenue Variable costs: $ 780 620 180 63 140 $ (223) 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.) Manufacturing Selling and administrative Contribution margin Fixed costs Operating profit < Required A (All revenues and costs in $000) Status Quo Alternative 7300 Units 5000 Units Difference Required B >

Nardin Outfitters has a capacity to produce 21,000 of their special arctic tents per year. The company is currently producing and selling 5,000 tents per year at a selling price of $1,800 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 2,300 tents at a price of $780 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 $63 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 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? Required A Complete this question by entering your answers in the tabs below. $ 620 180 170 140 $ 1,110 Required B Sales revenue Variable costs: $ 780 620 180 63 140 $ (223) 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.) Manufacturing Selling and administrative Contribution margin Fixed costs Operating profit < Required A (All revenues and costs in $000) Status Quo Alternative 7300 Units 5000 Units Difference Required B >

FINANCIAL ACCOUNTING
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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Nardin Outfitters has a capacity to produce 21,000 of their special arctic tents per year. The company is currently producing and selling 5,000 tents per year at a selling price of $1,800 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 2,300 tents at a price of $780 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 $63 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 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? Required A Complete this question by entering your answers in the tabs below. $ 620 180 170 140 $ 1,110 Required B Sales revenue Variable costs: $ 780 620 180 63 148 $ (223) 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.) Manufacturing Selling and administrative Contribution margin Fixed costs Operating profit < Required A (All revenues and costs in $000) Status Quo 5000 Units Alternative 7300 Units Difference Required B >
Transcribed Image Text:Nardin Outfitters has a capacity to produce 21,000 of their special arctic tents per year. The company is currently producing and selling 5,000 tents per year at a selling price of $1,800 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 2,300 tents at a price of $780 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 $63 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 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? Required A Complete this question by entering your answers in the tabs below. $ 620 180 170 140 $ 1,110 Required B Sales revenue Variable costs: $ 780 620 180 63 148 $ (223) 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.) Manufacturing Selling and administrative Contribution margin Fixed costs Operating profit < Required A (All revenues and costs in $000) Status Quo 5000 Units Alternative 7300 Units Difference Required B >
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