Decision on Accepting Additional Business

Homestead Jeans Co. has an annual plant capacity of 64,700 units, and current production is 46,800 units. Monthly fixed costs are $41,200, and variable costs are $25 per unit. The present selling price is $37 per unit. On November 12 of the current year, the company received an offer from Dawkins Company for 15,200 units of the product at $29 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.

Decision on Accepting Additional Business Homestead Jeans Co. has an annual p ant capacity of 64,700 units, and cu ent production s 46,800 units. Monthly fixed costs are $4,20 , and va able costs are $25 per unit. The present seling ice is 37 per un t O ember2 of the ment year, the company received an offer from Dawkins Company for 15,200 units of the product at $29 each. Dawkins Company will market the units in a foreign country under its awn 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 (Alternative 1) or accept (Alternative 2) the Dawkins order. If an amount is zero, enter "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 (AIt. 2) Reject Order (Altenative 1) Accept Order (Atemative 2) Differential Effect on Income (Aternative 2) Revenues ariable manufacturing costs Income (Loss) b. Having unused capacity available is to this decision. The differential revenue is than the differential cost. Thus, accepting this additional business will result in a net c. What is the minimum price per unit that would produce a positive contribution margin? Round your answer to two decimal places