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Assume that MTA Sandwiches sells sandwiches for $3.55 each. The cost of each sandwich follows. Materials Labor Variable overhead Fixed overhead ($24,750 per month, 22,500
Assume that MTA Sandwiches sells sandwiches for $3.55 each. The cost of each sandwich follows. Materials Labor Variable overhead Fixed overhead ($24,750 per month, 22,500 units per month) Total costs per sandwich $0.90 0.80 0.20 1.10 $ 3.00 One of MTA's regular customers asked the company to fill a special order of sandwiches at a selling price of $2.45 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 $3.00 and has asked for your advice. Required: a. Prepare a schedule to show the impact on MTA's profits of providing 500 sandwiches in addition to the regular production and sales of 22,500 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? Required A Required B Prepare a schedule to show the impact on MTA's profits of providing 500 sandwiches in addition to the regular production and sales of 22,500 sandwiches per month. (Select option "higher" or "lower", keeping Status Quo as the base. Select "none" if there is no effect.) Difference Status Quo 22,500 Units $ 79,875 Alternative 23,000 Units $ 81,100 $ Sales revenue 1,225 higher Less variable costs: Materials 20,250 20,700 450 Labor Variable overhead $ 20,250 $ 20,700 $ 450 Total variable cost Contribution margin Less: Fixed costs Operating profit Required A Required 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? (Enter your answer to 2 decimal places.). Lowest price per sandwich
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