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Alpine Luggage has a capacity to produce 380,000 suitcases per year. The company is currently producing and selling 300,000 units per year at a selling
Alpine Luggage has a capacity to produce 380,000 suitcases per year. The company is currently producing and selling 300,000 units per year at a selling price of $404 per case. The cost of producing and selling one case follows $ 162 sts vanaol uring.costs Variable selling and administrative costs Fixed selling and administrative costs 86 19 Total costs 308 The company has received a special order for 20,000 suitcases at a price of $249 per case. It will not have to pay any sales commission on the special order, so the variable selling and administrative costs would be only $48 per suitcase. The special order would have no effect on total fixed costs. The company has rejected the offer based the following computations Varlable manutacturine sts 02 Fived manufacturing.costs Variable selling and administrative costs Fixed selling and administrative costs 48 19 (22) Net profit (loss) per case Required: a. What is the impact on profit for the year if Alpine accepts the special order? (Enter your answers in option "higher" or "lower", keeping Status Quo as the base. Select none" if there is no effect) $000) (All costs Status Quo Alternative Difference 300,000 Units 320,000 Units Sales revenue Varlable costs: Manufacturing Selling and administrative Contribution margin Fixed costs Operating profit
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