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Assume that MTA Sandwiches sells sandwiches for $3.35 each. The cost of each sandwich follows. Materials Labor $1.10 0.30 Variable overhead 0.40 Fixed overhead ($22,250
Assume that MTA Sandwiches sells sandwiches for $3.35 each. The cost of each sandwich follows. Materials Labor $1.10 0.30 Variable overhead 0.40 Fixed overhead ($22,250 per month, 17,800 units per month) 1.25 Total costs per sandwich $3.05 One of MTA's regular customers asked the company to fill a special order of sandwiches at a selling price of $2.10 each for a fund- raising event sponsored by a social club at the local college. MTA has capacity to fill it without affecting total fixed costs for the month. MTA's general manager was concerned about selling the sandwiches below the cost of $3.05 and has asked for your advice. Required: a. Prepare a schedule to show the impact on MTA's profits of providing 800 sandwiches in addition to the regular production and sales of 17,800 sandwiches per month. b. Based solely on the data given, what is the lowest price per sandwich at which the special order can be filled without reducing MTA's profits? Complete this question by entering your answers in the tabs below. Required A Required B Prepare a schedule to show the impact on MTA's profits of providing 800 sandwiches in addition to the regular production and sales of 17,800 sandwiches per month. (Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) Sales revenue Less variable costs: Status Quo 17,800 Units Alternative 18,600 Units Difference Materials Labor Variable overhead Total variable cost $ 0 $ 0 $ 0 Contribution margin Less: Fixed costs Operating profit < Required A Required B >
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