B. In-Season Export Corporation is a Jamaican company specializing in the production of fruit medley. The...
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B. In-Season Export Corporation is a Jamaican company specializing in the production of fruit medley. The company sells to several grocery stores in Florida. The company has the capacity to produce 50,000 units annually. The following is a summary of the company income statement for 2021. Sales (35,000 units @ $25) $875,000 Variable manufacturing and selling expense - $11.50 per unit ($402,500) Contribution Margin $472,000 Fixed Costs ($250,000) Operating Income $222.500 A distributor in Florida is opening another store in Texas and has offered to buy 13,000 units. They are proposing to pay 80% of the current selling price. To fulfill this order, the distributor requires a specialized packaging material which would cost the company $3.50 per unit. In addition, a special machine costing $40,000 would be needed to separate the special order from the regular production. This machine would be useless to In-Season once this order is filled. Required: Prepare an analysis showing ALL relevant figures. What decision should be made - accept or reject the special? B. In-Season Export Corporation is a Jamaican company specializing in the production of fruit medley. The company sells to several grocery stores in Florida. The company has the capacity to produce 50,000 units annually. The following is a summary of the company income statement for 2021. Sales (35,000 units @ $25) $875,000 Variable manufacturing and selling expense - $11.50 per unit ($402,500) Contribution Margin $472,000 Fixed Costs ($250,000) Operating Income $222.500 A distributor in Florida is opening another store in Texas and has offered to buy 13,000 units. They are proposing to pay 80% of the current selling price. To fulfill this order, the distributor requires a specialized packaging material which would cost the company $3.50 per unit. In addition, a special machine costing $40,000 would be needed to separate the special order from the regular production. This machine would be useless to In-Season once this order is filled. Required: Prepare an analysis showing ALL relevant figures. What decision should be made - accept or reject the special?
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