24-3

Accept Business at Special Price

Product A is normally sold for $9.60 per unit. A special price of $7.20 is offered for the export market. The variable production cost is $5.00 per unit. An additional export tariff of 15% of revenue must be paid for all export products. Assume there is sufficient capacity for the special order.

Prepare a differential analysis dated March 16, 2014, on whether to reject (Alternative 1) or accept (Alternative 2) the special order. Round your answers to two decimal places. If an amount is zero, enter zero "0".

Differential Analysis
Reject Order (Alt. 1) or Accept Order (Alt. 2)
March 16, 2014
		Reject Order (Alternative 1)		Accept Order (Alternative 2)		Differential Effect on Income (Alternative 2)
Revenues, per unit		$		$		$
Costs:
Variable manufacturing costs, per unit
Export tariff, per unit
Income (Loss), per unit		$		$		$