Accept Business at Special Price

A product is normally sold for $$46$ per unit. A special price of $$31$ is offered for the export market. The variable production cost is $$26$ per unit. An additional export tariff of $11\%$ 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. If required, 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

$Revenues, per unit

Costs:

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

Variable manufacturing costs, per unit

Variable manufacturing costs, per unit

Export tariff, per unit Export tariff, per unit

Export tariff, per unit

Export tariff, per unit

Profit $($loss$),$ per unit $fill in the blank b$98056$fecfa$504$c$\_10$

$fill in the blank b$98056$fecfa$504$c$\_11$

$fill in the blank b$98056$fecfa$504$c$\_12$

Question Content Area

b$.$ Should the special order be rejected $($Alternative $1)$ or accepted $($Alternative $2)?$