**Accept Business at Special Price**Product A is normally sold for $9.60 per unit. A special price of $7.20 is offered for the export market. The variable production cost is $5.00 per unit. An additional export tariff of 15% 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. 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 Order (Alternative 1) | Accept Order (Alternative 2) | Differential Effects (Alternative 2) ||-----------------------|-----------------------------|-----------------------------|-------------------------------------|| Revenues, per unit | $ - | $ 7.20 ✅ | $ 7.20 ✅ || Costs: | | | || Variable manufacturing costs, per unit | $ - | $ 5.00 ✅ | $ 5.00 ✅ || Export tariff, per unit | $ - | $ 1.08 ✅ | $ 1.08 ✅ || Profit (loss), per unit | $ - | $ 1.12 ✅ | $ 1.12 ✅ |**b.** Should the special order be rejected (Alternative 1) or accepted (Alternative 2)?> Accept the special order ✅**Explanation:**The table displays a comparison between rejecting and accepting a special order. The "Accept Order" column under Alternative 2 shows positive revenues, costs, and profit per unit upon accepting the order. Meanwhile, the "Reject Order" column has no financial data filled because rejecting the order results in no revenue or costs. The ultimate decision, based on the analysis, is to accept the special order as it results in a profit of $1.12 per unit.

Product A is normally sold for $9.60 per unit. A special price of $7.20 is offered for the export market. The variable production cost is $5.00 per unit. An additional export tariff of 15% 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. Round your answers to two decimal places. If an amount is zero, enter "0". Revenues, per unit Costs: Differential Analysis Reject Order (Alt. 1) or Accept Order (Alt. 2) March 16 Variable manufacturing costs, per unit Export tariff, per unit Profit (loss), per unit Reject Accept Differential Effects Order Order (Alternative 1) (Alternative 2) (Alternative 2) $7.20 $ 7.20 X X X X 5.00 1.08 1.12 5.00 1.08 1.12 b. Should the special order be rejected (Alternative 1) or accepted (Alternative 2)? Accept the special order

Product A is normally sold for $9.60 per unit. A special price of $7.20 is offered for the export market. The variable production cost is $5.00 per unit. An additional export tariff of 15% 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. Round your answers to two decimal places. If an amount is zero, enter "0". Revenues, per unit Costs: Differential Analysis Reject Order (Alt. 1) or Accept Order (Alt. 2) March 16 Variable manufacturing costs, per unit Export tariff, per unit Profit (loss), per unit Reject Accept Differential Effects Order Order (Alternative 1) (Alternative 2) (Alternative 2) $7.20 $ 7.20 X X X X 5.00 1.08 1.12 5.00 1.08 1.12 b. Should the special order be rejected (Alternative 1) or accepted (Alternative 2)? Accept the special order

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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