Suppose in the preceding question, all information is the same except that the present sale volume to regular customers is 4,000 liters. Should Z Company still accept the special order? O O Yes, because operating income would increase by P45,000.00. Yes, because operating income would increase by P9,000.00 No, because operating income would decrease by P4,000.00 No, because operating income would be the same.
Suppose in the preceding question, all information is the same except that the present sale volume to regular customers is 4,000 liters. Should Z Company still accept the special order? O O Yes, because operating income would increase by P45,000.00. Yes, because operating income would increase by P9,000.00 No, because operating income would decrease by P4,000.00 No, because operating income would be the same.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
What is the correct answer to question 1 and 2?
Transcribed Image Text:Suppose in the preceding question, all
information is the same except that the
present sale volume to regular
customers is 4,000 liters. Should Z
Company still accept the special order?
O
O
O
Yes, because operating income would
increase by P45,000.00.
Yes, because operating income would
increase by P9,000.00
No, because operating income would
decrease by P4,000.00
No, because operating income would be the
same.
Transcribed Image Text:Z Company sells product called resin. It
received a special order for 1,500 liters
of resin from A, a valued client of Z
Company. A asked for a 40% off of the
regular selling price of P50.00 per liter.
Pertinent data about the product resin
are as follows:
Normal plant capacity
liters
Present sales volume to
customers 3,500 liters
Production costs
Materials
Labor
Factory overhead
variable
fixed
OP6,000.00 profit
P6,000.00 loss
5,000
The special order will not require
additional selling and administrative
costs and the same will not affect
regular sales.
P9,000.00 profit
P15.00 per liter
P5.00 per liter
Question: Should Z Company accept the
special order, how much would be the
incremental profit using differential
analysis?
P9,000.00 loss
P4.00 per liter
P9,250.00
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