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1. AGAPE SUKSES MAKMUR cans peaches for sale to food distribu-tors. All costs are classified as either manufacturing or marketing. Burst prepares monthly budgets. The

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1. AGAPE SUKSES MAKMUR cans peaches for sale to food distribu-tors. All costs are classified as either manufacturing or marketing. Burst prepares monthly budgets. The March 2012 budgeted absorption-costing income statement is as follows: -Monthly costs are classified as fixed or variable (with respect to the number of crates produced for manufacturing costs and with respect to the number of crates sold for marketing costs): -AGAPE SUKSES MAKMUR has the capacity to can 2,000 crates per month. The relevant range in which monthly fixed manufac tuing cts will be "fixed" is from 500 to 2,000 crates per month. -Executive Suites offers free breakfast to guests. In April, there were an average of 1.0 breakfasts served perroom night on weeknights and 2.5 breakfasts served per room night on weekend nights. o o o o o Revenues (1,000 crates S117 a crate) * Cost of goods sold Gross margin Marketing costs Operating income $117,000 65,000 52,000 30,000 Gross margin markup percentage: $52,000 sold full manufacturing cost) $65,000 80% of cost of goods Variable S35,000 17,000 Fixed Manufacturing S30,000 ReuiredMarketing530,000 a. Calculate the markup percentage based on total variable costs. b. Assume that a new customer approaches AGAPE SUKSES MAKMUR to buy 200 crates at S55 per crate for cash. The cus-tomer does not require any marketing effort. Additional manufacturing costs of $3,000 (for special packaging) will be required. AGAPE SUKSES MAKMUR believes that this is a one-time-only special order because the cus-tomer is discontinuing business in six weeks' time. AGAPE SUKSES MAKMUR is reluctant to accept this 200-crate special order because the S55-per-crate price is below the $65-per-crate full manufacturing cost. Do you agree with this reasoning? Explain

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