Raymond Industries has an annual plant capacity of 66,000 units; current production is 50,000 units per...

  

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Raymond Industries has an annual plant capacity of 66,000 units; current production is 50,000 units per year. At the current production volume, the variable cost per unit is $35.00 and the fixed cost per unit is $4.60. The normal selling price of Raymond's product is $43.00 per unit. Raymond has been asked by Caldwell Company to fill a special order for 11,000 units of the product at a special sales price of $26.00 per unit. Caldwell is located in a foreign country where Raymond does not currently operate. Caldwell will market the units in its country under its own brand name, so the special order is not expected to have any effect on Raymond's regular sales. Read the requirements Requirement 1. How would accepting the special order impact Raymond's operating income? Should Raymond accept the special order? Complete the following incremental analysis to determine the impact on Raymond's operating income if it accepts this special order. (Enter a "0" for any zero balances. Use parentheses or a minus sign to indicate a decrease in contribution margin and/or operating income from the special order.) Incremental Analysis of Special Sales Order Decision Total Order (11,000 units) Revenue from special order Less expenses associated with the order. Less: Variable manufacturing cost Contribution margin Less: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special order Raymond Industries has an annual plant capacity of 66,000 units; current production is 50,000 units per year. At the current production volume, the variable cost per unit is $35.00 and the fixed cost per unit is $4.60. The normal selling price of Raymond's product is $43.00 per unit. Raymond has been asked by Caldwell Company to fill a special order for 11,000 units of the product at a special sales price of $26.00 per unit. Caldwell is located in a foreign country where Raymond does not currently operate. Caldwell will market the units in its country under its own brand name, so the special order is not expected to have any effect on Raymond's regular sales. Read the requirements Requirement 1. How would accepting the special order impact Raymond's operating income? Should Raymond accept the special order? Complete the following incremental analysis to determine the impact on Raymond's operating income if it accepts this special order. (Enter a "0" for any zero balances. Use parentheses or a minus sign to indicate a decrease in contribution margin and/or operating income from the special order.) Incremental Analysis of Special Sales Order Decision Total Order (11,000 units) Revenue from special order Less expenses associated with the order. Less: Variable manufacturing cost Contribution margin Less: Additional fixed expenses associated with the order Increase (decrease) in operating income from the special order

Answer rating: 100% (QA)

When using the direct method to prepare the operating activities section of the statement of cash flows the adjustment rule used to convert sales reve... View the full answer