Nardin Outfitters has a capacity to produce 12,000 of their special arctic tents per year. The company is currently producing and selling 5,000 tents per year at a selling price of $900 per tent. The cost of producing and selling one tent follows: Variable manufacturing costs$ 440Fixed manufacturing costs90Variable selling and administrative costs80Fixed selling and administrative costs50Total costs$ 660The company has received a special order for 500 tents at a price of $600 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 $45 per tent. The special order would have no effect on total fixed costs. The company has rejected the offer based on the following computations: Selling price per case$ 600Variable manufacturing costs440Fixed manufacturing costs90Variable selling and administrative costs45Fixed selling and administrative costs50Net profit (loss) per case$ (25) 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?(Please fill out chart in attached photo for A) 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 ARequired BWhat is the impact on profit for the year if Nardin Outfitters accepts the special order? (Enter your answers in thousandsrounded to 1 decimal place. (i.e., 5,400,400 should be entered as 5,400.4). Select option "higher" or "lower", keeping StatusQuo as the base. Select "none" if there is no effect.)Sales revenueVariable costs:ManufacturingSelling and administrativeContribution marginFixed costsOperating profit(All revenues and costs in $000)Status Quo5,000 UnitsAlternative5,500 UnitsDifference

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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 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 Contribution margin Fixed costs Operating profit (All revenues and costs in $000) Status Quo 5,000 Units Alternative 5,500 Units Difference

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 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 Contribution margin Fixed costs Operating profit (All revenues and costs in $000) Status Quo 5,000 Units Alternative 5,500 Units Difference

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 77E: Ratio Analysis The following information was taken from Logsden Manufacturings trial balances as of...

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Variable manufacturing costs	$ 440
Fixed manufacturing costs	90
Variable selling and administrative costs	80
Fixed selling and administrative costs	50
Total costs	$ 660

Selling price per case	$ 600
Variable manufacturing costs	440
Fixed manufacturing costs	90
Variable selling and administrative costs	45
Fixed selling and administrative costs	50
Net profit (loss) per case	$ (25)

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