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Decision on Accepting Additional Business Country Jeans Co. has an annual plant capacity of 63,100 units, and current production is 45,300 units. Monthly fixed costs
Decision on Accepting Additional Business Country Jeans Co. has an annual plant capacity of 63,100 units, and current production is 45,300 units. Monthly fixed costs are $38,000, and variable costs are $25 per unit. The present selling price is $33 per unit. On November 12 of the current year, the company received an offer from Miller Company for 16,800 units of the product at $29 each. Miller Company will market the units in a foreign country under its own brand name. The additional business is not expected to affect the domestic selling price or quantity of sales of Country Jeans Co. a. Prepare a differential analysis dated November 12 on whether to reject (Alternative 1) or accept (Alternative 2) the Miller order. If an amount is zero, enter zero *o* For those boxes in which you must enter subtracted or negative numbers use a minus sign Differential Analysis Reject Order (Alt. 1) or Accept Order (Alt. 2) November 12 Differential Reject Accept Effect Order on Income (Alternative 1) (Alternative 2) (Alternative 2) Revenues Costs Variable manufacturing costs Order o Income (Loss) Check My Wor a Subtract the additional costs from the additional events for accepting the order! to this decision. The differential revenue is more than the differential cost. Thus, accepting this b. Having unused capacity available is relevant additional business will result in a net gain b. Having unused capacity available is relevant to this decision. The differential revenue is more than the differential cost. Thus, acc additional business will result in a net gain C. What is the minimum price per unit that would produce a positive contribution margin? Round your answer to two decimal places. Feedback
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