Decision on Accepting Additional Business

Down Home Jeans Co$.$ has an annual plant capacity of $63,900$ units, and current production is $44,600$ units. Monthly fixed costs are $$40,300,$ and variable costs are $$25$ per unit. The present selling price is $$36$ per unit. On November $12$ of the current year, the company received an offer from Fields Company for $13,900$ units of the product at $$27$ each. Fields 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 Down Home Jeans Co$.$

Question Content Area

a$.$ Prepare a differential analysis dated November $12$ on whether to reject $($Alternative $1)$ or accept $($Alternative $2)$ the Fields order. If an amount is zero, enter zero $"0".$ 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 $12$

Reject

Order

$($Alternative $1)$ Accept

Order

$($Alternative $2)$ Differential

Effect

on Income

$($Alternative $2)$

Revenues $fill in the blank b$86$e$6$dfb$1$fbef$8$c$\_1$ $fill in the blank b$86$e$6$dfb$1$fbef$8$c$\_2$ $fill in the blank b$86$e$6$dfb$1$fbef$8$c$\_3$

Costs:

Variable manufacturing costs fill in the blank b$86$e$6$dfb$1$fbef$8$c$\_4$ fill in the blank b$86$e$6$dfb$1$fbef$8$c$\_5$ fill in the blank b$86$e$6$dfb$1$fbef$8$c$\_6$

Income $($Loss$)$ $fill in the blank b$86$e$6$dfb$1$fbef$8$c$\_7$ $fill in the blank b$86$e$6$dfb$1$fbef$8$c$\_8$ $fill in the blank b$86$e$6$dfb$1$fbef$8$c$\_9$

B$.$ What is the minimum price per unit that would produce a positive contribution margin? Round your answer to two decimal places.