LMS, Inc. manufactures stadium seat cushions. LMS's contribution margin income statement for the most recent month contains
Question:
LMS, Inc. manufactures stadium seat cushions. LMS's contribution margin income statement for the most recent month contains the following data:
Underwood Company has offered \(\$ 9\) per unit for 5,000 stadium seat cushions, which is below the normal sale price of S14. Acceptance of the order will not increase any of L.MS's marketing and administrative expenses. The LMS plant has enough unused capacity to manufacture the additional cushions.
Requirements
1. Prepare an incremental analysis to determine the change in operating income if L.MIS accepts the special sales order. Should L.MS accept the order?
2. Identify long-term factors LMS should consider in deciding whether to accept the special sales order.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Question Posted: