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10 Exercise 4-36 (Algo) Special Orders (LO 4-1,2) Mario's Food Service provides meals that nonprofit organizations distribute to handicapped and elderly people. The following is
10 Exercise 4-36 (Algo) Special Orders (LO 4-1,2) Mario's Food Service provides meals that nonprofit organizations distribute to handicapped and elderly people. The following is her forecasted income statement for April, when she expects to produce and sell 2,600 meals: Amount Per unit Sales revenue 314,560 55.60 Costs of meals produced 11.100 Gross profit 53,380 51.30 Administrative costs 1.300 Operating profit 5 2,000 50.30 4.30 0.50 Fixed costs included in this income statement are $3,796 for meal production and $S20 for administrative costs. Maria has received special request from an organization sponsoring a picnic to raise funds for the Special Olympics. This organization is willing to pay $3.30 per meal for 300 meals on April 10. Marin has sufficient idle capacity to fill this special order. These meals will incur all of the variable costs of meals produced, but variable administrative costs and total fixed costs will not be affected Required: a. What impact would accepting this special order have on operating profit? (Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.)
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