A LON-CAPA PROBLEM #5 (X c A https//s3 lite.msuedu/res/msu/jacobs/HomeworkProblems/ specialorderf05.problem?symb=uploaded%2fmsu%280 Chenyan Sun v (Student section: 001) ACC230, Spring 2016 - Survey of Accounting Concepts g Messages Courses Help Logout Main Menu contents Grades course contents PROBLEM #5 (SPECIAL ORDER DECISION] FO Timer O Notes a Evaluate a a Feedback E Print O Info This is a special order problem that deals with a service rather than a product. But the concepts for determining the profit from the special order remain the same. And the ultimate question still is: Should the special offer from this customer be accepted or not? For guidance, use the example in the Special Order lecture and the special order study problems. As with almost all of the analyses that we have done, determining what costs are variable and what costs are fixed is a critical part of the analysis. Preston Concrete is a major supplier of concrete to residential and commercial builders in the Pacific Northwest. The companys general pricing polic to set prices at $117 per cubic yard. Deliveries for 2015 were 410,000 cubic yards. Costs per cubic yard were: Material costs $69.10 Yard operation costs $13.00 Administrative costs $3.70 26% of the estimated costs were and yard operation fixed, all of the costs . In addition to the costs estimated fixed administrative were fixedabove, delivery costs $180000 for the , and estimated variable delivery costs were $6.00 per mile and $38.00 per truck hour. The rate per mile were year reflects the fact that more miles result more gasoi Jobsite are kept running (the t to . The per hour the fact trucks that are at a so concrete mix wonsolidify, continue get paid during that time and maintenancerate truck reflects that waiting Near the Construction for a delivery yards was end of 2015, Fairview Company asked of 4,700 cubic of concrete was only wi ling to pay $88 per yard. Preston estimated that the job would require 7,300 n but unwilling to pay the regular price in Pacific slowed during recent months, Preston to fill the order, but sales was market the Northwest had ving and 210 truck hours. The housing leaving with enough capacity its manager reluctant to commit such reduced to a price. REQUIRED If Preston accepted the offer, what would the profit or loss have been center a loss as a negative number Submit Answer Tries 0/10 Fixed cost relevance Anonymous 1 Reply (Wed Mar 16 0359:54 ( :pm 2016 EDT)) NE