Question
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
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.
Alexlis Corporation has the following budgeted operating results for 2014: (35 points) Alexlis Corporation has the following budgeted operating results for 2014: (35 points)
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