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Decision on Accepting Additional Business Brightstone Tire and Rubber Company has capacity to produce 281,000 tires. Brightstone presently produces and sells 215,000 tires for the

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Decision on Accepting Additional Business Brightstone Tire and Rubber Company has capacity to produce 281,000 tires. Brightstone presently produces and sells 215,000 tires for the North American market at a price of $108 per tire. Brightstone is evaluating a special order from a European automobile company, Euro Motors. Euro is offering to buy 33,000 tires for $90.2 per tire. Brightstone's accounting system indicates that the total cost per tire is as follows: Brightstone pays a selling commission equal to 5% of the selling price on North American orders, which is included in the variable portion of the selling and administrative expenses. However, this special order would not have a sales commission. If the order was accepted, the tires would be shipped overseas for an additional shipping cost of $6 per tire. In addition, Euro has made the order conditional on a. Prepare a differential analysis dated January 21 on whether to reject (Alternative 1) or accept (Alternative 2) the special order from Euro Motors, If an amount is zero, enter zero " 0 ", If required, round interim calculations to two decimal places. Brightstone pays a selling commission equal to 5% of the selling price on North American orders, which is included in the variable portion of the selling and administrative expenses. However, this special order would not have a sales commission. If the order was accepted, the tires would be shipped overseas for an additional shipping cost of $6 per tire. In addition, Euro has made the order conditional on receiving European safety certification. Brightstone estimates that this certification would cost $188,100. a. Prepare a differentlal analysis dated January 21 on whether to reject (Alternative 1) or accept (Alternative 2) the special order from Euro Motors, If an amount is zero, enter zero " 0 ". If required, round interim calculations to two decimal places. Check My Work a. Subtract the additional costs (each unit cost multiplied by 33,000 tires) from the additional revenue ($90.2 multiplied by the number offer). The variable selling and administrative expenses are 40% of $22, less 5% of $108 sales commission per unit. Determine whether to reject (Alternative 1) or accept (Alternative 2) the special order from Euro Motors. b. What is the minimum price per unit that would be financially acceptable to Brightstone? Round your answer to two decim per unit

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