48 Chapter 24 Differential Analysis and Product Pricing EX 24-15 Decision on accepting additional business A. Differential Talladega Tire and Rubber Company has capacity to produce 500,000 tires. Tallade revenues, $15,000,000 produces and sells 400,000 tires for the North American market at a price of $2 Talladega is evaluating a special order from a European automobile company, Autcht tors. Autobahn is offering to buy 100,000 tires for $150 per tire. Talladega's indicates that the total cost per tire is as follows: accounting system SHOW ME HOW EXCEL TEMPLATE Direct materials Direct labor Factory overhead (70% variable) Selling and administrative expenses (60% variable) Total s 75 20 30 18 143 Talladega pays a selling commission equal to 3% of the selling price on North American orders, which is included in the variable portion of the selling and administrathve expenses. However, this special order would not have a sales commission. If the order was accepted, the tires would be shipped overseas for an additional shipping cost of $3 per tire In addition, Autobahn has made the order conditional on receiving European safety certification Talladega estimates that this certification would cost $400,000. A. Prepare a differential analysis dated July 31 on whether to reject (Alternative 1) or accep Alternative 2) the special order from Autobahn Motors. B. What is the minimum price per unit that would be financially acceptable to Talladega