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Assume that a Belco's soup plant is running at 76% of its monthly capacity. Belco's has received a special order to produce 145.000 cases of

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Assume that a Belco's soup plant is running at 76% of its monthly capacity. Belco's has received a special order to produce 145.000 cases of chicken toode soup for a national supermart The supermarket will the opera un private brand label. The soup will be the same in all respects, except for the label, which will cost Belco's an extra $10.000 in total to design. The supermarket has offered to pay only $30.00 percase, which is well under Dercos roma price. Costs at the current production level (450,000 cases) are as follows Click the loon to view the table) 1. 2. Is there enough coas capacity to this order? Wil Belco's operating income increase or decrease if it accepts this special order? By how much? 1. Is there enough excess capacity to this order? w the plant is producing 450,000 cases a month, yet only operating M79% of capacity, it must have a capachy Hevel of cases per month. This means the plant has excess capacity of coses per month there is enough capacity to il this special order 2. We belco's operating income increase or decrease if it sccepts this special order? By how much Complete the following incremental analysis to help you make your recommendation. (Ute parentheses or a minus sign to indicate a decrease in operating income) Total for order Incremental Analysis of Special Order Per Unit (145.000 cases) Revenue from special order at special order price) Contribution margin from the special order Increases in operating income from the special order Total Cost Cost per Case (450,000 cases) Direct Materials $ 7,200,000 $ 16.00 Direct Labor 1,350,000 3.00 Variable MOH 6.00 2,700,000 4,050,000 Fixed MOH 9.00 $ Total 15,300,000 34.00

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