2 Maria'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 3,400 meals: 2 Amount points Sales revenue Costs of meals produced Gross profit Administrative costs $ 21,760 15,980 $ 5,780 2,380 Operating profit $ 3,400 Per Unit $6.40 4.70 $ 1.70 0.70 $ 1.00 Fixed costs included in this income statement are $5,236 for meal production and $680 for administrative costs. Maria has received a special request from an organization sponsoring a picnic to raise funds for the Special Olympics. This organization is willing to pay $3.70 per meal for 300 meals on April 10. Maria 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.) > Answer is complete but not entirely correct. Status Quo 3,400 Alternative 3,700 Units Difference Units Sales revenue $ 21,760 $ 22,870 $ 1,110 higher Variable costs: Meals 15,980 11,692 4,288 higher Administrative 2,380 X 2,380 X Contribution margin $ 8,636 $ 8,798 $ 0 162 higher none Fixed costs 5,196 Operating profit $ 3,400 $ 5,196 X 3,602 $ 0 202 higher none b. From an operating profit perspective for April, should Maria accept the order? Yes No 4 Assume that MTA Sandwiches sells sandwiches for $3.20 each. The cost of each sandwich follows. 2 Materials Labor points Variable overhead Fixed overhead ($17,850 per month, 21,000 units per month) Total costs per sandwich $0.80 0.60 0.40 0.85 $2.65 One of MTA's regular customers asked the company to fill a special order of sandwiches at a selling price of $2.35 each for a fund- raising event sponsored by a social club at the local college. MTA has capacity to fill it without affecting total fixed costs for the month. MTA's general manager was concerned about selling the sandwiches below the cost of $2.65 and has asked for your advice. Required: a. Prepare a schedule to show the impact on MTA's profits of providing 800 sandwiches in addition to the regular production and sales of 21,000 sandwiches per month. Answer is not complete. Complete this question by entering your answers in the tabs below. Required A Required B Prepare a schedule to show the impact on MTA's profits of providing 800 sandwiches in addition to the regular prod sales of 21,000 sandwiches per month. (Select option "higher" or "lower", keeping Status Quo as the base. Select there is no effect.) Status Quo 21,000 Alternative 21,800 Difference Units Units Sales revenue $ 67,200 $ 69,320 $ 2,120 higher Less variable costs: Materials 16,800 17,440 640 higher Labor 12,600 13,080 480 higher Variable overhead 8,400 8,720 320 higher Total variable cost $ 37,800 $ 39,240 $ 1,440 Contribution margin $ 29,400 $ Less: Fixed costs 17,850 Operating profit $ 11,550 $ 30,080 $ 17,850 12,230 $ 680 higher 0 none 680 higher < Required A Required B >