A product is normally sold for $$42$ per unit. A special price of $$35$ is offered for the export market. The variable production cost is $$21$ per unit. An additional export tariff of $10\%$ of revenue must be paid for all export products. Assume there is sufficient capacity for the special order.

Question Content Area

a$.$ Prepare a differential analysis dated December $15$ 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 $"0".$

Differential Analysis

Reject $($Alt$.1)$ or Accept $($Alt$.2)$ Order

December $15$

Line Item Description Reject

Order

$($Alternative $1)$ Accept

Order

$($Alternative $2)$ Differential

Effects

$($Alternative $2)$

Revenues, per unit $Revenues, per unit

$Revenues, per unit

$35$

$Revenues, per unit

Costs:

Variable manufacturing costs, per unit Variable manufacturing costs, per unit

Variable manufacturing costs, per unit

$21$

Variable manufacturing costs, per unit

Export tariff, per unit Export tariff, per unit

$0$

Export tariff, per unit

$3\mathrm{.}50$

Export tariff, per unit

$-3\mathrm{.}50$

Profit $($loss$),$ per unit $Profit $($loss$),$ per unit

$Profit $($loss$),$ per unit

$10\mathrm{.}50$

$Profit $($loss$),$ per unit

$10\mathrm{.}50$