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Alpine Luggage has a capacity to produce 440,000 suitcases per year. The company is currently producing and selling 360,000 ur per year at a selling
Alpine Luggage has a capacity to produce 440,000 suitcases per year. The company is currently producing and selling 360,000 ur per year at a selling price of $399 per case. The cost of producing and selling one case follows: Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative costs Fixed selling and administrative costs Total costs $ 155 41 75 19 $ 290 The company has received a special order for 40,000 suitcases at a price of $251 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 $52 per suitcase. The special order would have no effect on total fixed costs. The company has rejected the offer based on the following computations: Selling price per care Variable manufacturing costs Fixed manufacturing costs Variable selling and administrative costs Fixed selling and administrative costs tut of it (16) g ( Vit $ 251 155 01 52 19 $ (16) Required: . What is the impact on profit for the year it Alpine accepts the special order? (Enter your answers in thousands of dollars. Select option "higher" or "lower", keeping Status Quo as the base. Select "none" there is no effect.)
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