Decision on Accepting Additional Business Brightstone Tire and Rubber Company has capacity to produce 187,000 tires. Brightstone presently produces and sels 143,000 tires for te American market at a price of $98 per tire. Brightstone is evaluating a special order from a European automobile company, Eure Motors to buy 22,000 tires for $78.6 per tire. Brightstone's accounting system indicates that the total cost per tire is as follows f $37 Direct materials 14 Direct labor Factory overhead (60 % variable)) 23 20 Selling and administrative expenses (30 % variable) $94 Total on Accepting Additional Business Tre and Rubber Company has capacity to produce 187,000 tires. Brightstone presently prods and sets 143,000 tires for the North Amencan market at a price of $98 per tire. Brightstone is evaluating a special order from a European automobile company, Euro Motors. Euro is offering to buy 22,000 tires for $78.6 per tire. Brightstone's accounting system indicates that the total cost per tire is as follows: $37 Direct materials Direct labor 23 Factory overhead (60 % variable) 20 Selling and administrative expenses (30 % variable) $94 Total on equal to 5% of the selling price on North American orders, which is included in the variable portion of the selling However, this special order would not have a sales commission. If the order was accepted, the tires would be shipped Brightstone pays a selling comm and administrative expene overseas for an additio al shipping cost of $5 per tire. In addition, Euro has made the order conditional on receiving European safety certification Brightstone estimates that this certification would cost $114,400. a. Prepare a differential analysis dated January 21 on whether to reject (Alternative 1) or accept (Alternative 2) the special order from Euro Motors an amount is zero, enter zero "0". If required, round interim calculations to two decimal places. Differential Analysis Reject Order (Alt. 1) or Accept Order (Alt. 2) January 21 Differential Accept Reject Order Effect Order (Alternative 1) (Alternative 2) on Income (Alternative 2) Revenues an amount is zero, enter zero "0 If required, round interim calculations to two decimal places. Differential Analysis Reject Order (Alt. 1) or Accept January 7 Re (Alt. 2) Differential Effect Accept Order Alternative i) (Alternative 2) on Income (Alternative 2) Order Revenues Costs Direct material Direct labor Variable factory overhead Variable selling and admin. expenses Shipping costs Certification costs Income (Loss) Determine whether to reject (Alternative 1) or accept (Alternative 2) the special onder from Eur Motors Round your anwar to da ac b. What is the minimum price per unit that would be financially acceptable to Brightstone per unit
