Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

$750,000 6. Alexlis Corporation has the following budgeted operating results for 2014: Revenues (10,000 units @ $75) Variable costs: Manufacturing $300,000 Selling 90,000 Contribution margin

image text in transcribed
$750,000 6. Alexlis Corporation has the following budgeted operating results for 2014: Revenues (10,000 units @ $75) Variable costs: Manufacturing $300,000 Selling 90,000 Contribution margin Fixed costs: Manufacturing $160,000 Selling 100.000 Operating income 390.000 $360,000 260.000 $100.000 A foreign wholesaler wants to buy 2,000 units for $50 per unit. All fixed costs would remain within the relevant range. There will be no variable selling costs on the special-order units. Alexis Corporation can produce 15,000 units per year. Required: a. Redo the income statement assuming that the special order of 2,000 units was accepted. b. Should Alexis Corporation produce the special order? Justify your answer. If Alexis Corporation accepts the special order, they must produce and sell the entire 2,000 units for $50 per unit. c. Should Alexis Corporation produce a special order for 6,000 units for $50 per unit? Justify your answer by redoing the income statement assuming the special order. If Alexis Corporation accepts the special order, they must produce and sell the entire 6,000 units for $50. In other words, they may lose regular customers

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Frank Woods Business Accounting Volume 2

Authors: Frank Wood, Alan Sangster

10th Edition

0273693107, 978-0273693109

More Books

Students also viewed these Accounting questions

Question

Understand a department managers role in locating job candidates

Answered: 1 week ago