Decision on Accepting Additional Business

Homestead Jeans Co$.$ has an annual plant capacity of $66,900$ units, and current production is $45,200$ units. Monthly fixed costs are $$40,400,$ and variable costs are $$25$ per unit. The present selling price is $$35$ per unit. On November $12$ of the current year, the company received an offer from Dawkins Company for $13,700$ units of the product at $$28$ each. Dawkins 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 Homestead Jeans Co$.$

a$.$ Prepare a differential analysis dated November $12$ on whether to Reject Order $($Alternative $1)$ or Accept Order $($Alternative $2).$ 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 $12$

$\backslash$table$[[,\backslash$table$[[$Reject$],[$Order$],[($Alternative $1)]],\backslash$table$[[$Accept$],[$Order$],[($Alternative $2)]],\backslash$table$[[$Differential$],[$Effects$],[($Alternative $2)]]],[$Revenues$,$$$,$$$,$