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Alpine Luggage has a capacity to produce 370,000 sultcases per year. The company is currently producing and selling 290,000 units per year at a selling
Alpine Luggage has a capacity to produce 370,000 sultcases per year. The company is currently producing and selling 290,000 units per year at a selling price of $397 per case. The cost of producing and selling one case follows: The company has recelved a speclal order for 20,000 sultcases at a price of $252 per case. It will not have to pay any sales commission on the speclal order, so the varlable selling and administrative costs would be only $49 per sultcase. The speclal order would have no effect on total fixed costs. The company has rejected the offer based on the following computations: Requlred: a. What is the Impact on profit for the year If Alpine accepts the speclal order? (Enter your answers In thousands of dollars. Select optlon "higher" or "lower", keeping Status Quo as the base. Select "none" If there Is no effect.) b. Do you agree with the decision to reject the speclal order? Yes No
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