Pope Company manufacture a variety of hiking boots and has received a special one-time only order from a new customer. Pope has sufficient idle capacity to accept the special order to manufacturer 1,000 pairs of boots at a price of $50.00 per pair. Pope's normal selling price is $65.00 per pair of sneakers. Variable manufacturuing costs are $35.00 per pair and fixed manufacturing costs are $12.00 a pair. Pope's variable selling expense for its normal line of sneakers is $1.00 per pair. What would the effect on Pope's operating income be if the company accepted the special order?
Pope Company manufacture a variety of hiking boots and has received a special one-time only order from a new customer. Pope has sufficient idle capacity to accept the special order to manufacturer 1,000 pairs of boots at a price of $50.00 per pair. Pope's normal selling price is $65.00 per pair of sneakers. Variable manufacturuing costs are $35.00 per pair and fixed manufacturing costs are $12.00 a pair. Pope's variable selling expense for its normal line of sneakers is $1.00 per pair. What would the effect on Pope's operating income be if the company accepted the special order?
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 2CMA
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E8-5A | Special Order | ||||
Pope Company manufacture a variety of hiking boots and has received a special one-time only order from a new customer. Pope has sufficient idle capacity to accept the special order to manufacturer 1,000 pairs of boots at a price of $50.00 per pair. Pope's normal selling price is $65.00 per pair of sneakers. Variable manufacturuing costs are $35.00 per pair and fixed |
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