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Decision on Accepting Additional Business Miramar Tire and Rubber Company has capacity to produce 187,000 tires. Miramar presently produces and sells 143,000 tires for the

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Decision on Accepting Additional Business Miramar Tire and Rubber Company has capacity to produce 187,000 tires. Miramar presently produces and sells 143,000 tires for the North American market at a price of $108.00 per tire. Miramar is evaluating a special order from a South American automobile company, Rio Motors, Rio Motors is offering to buy 22,000 tires for $90.50 per tire. Miramar's accounting system indicates that the total cost per tire is as follows: Direct materials $41 Direct labor 15 Factory overhead (70% variable) 25 22 Selling and administrative expenses (30% variable) Total $103 Miramar pays a sales 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 supping cost of $6.00 per tire. In addition, Rio has made the order conditional on Miramar Tire and Rubber Company receiving a Brazilian safety certification. Ho estimates that this certification would cost Miramar Tire 5125,400. a. Prepare a differential analysis report for the proposed sale to Rio Motors. Round your answers to the nearest cont. Miramar Tire And Rubber Company Sell to Rio Motors Differential Analysis Report Per Unit Total Differential revenue from accepting special offer Differential costs from accepting special offeri (Enter per unit cost amounts as positive values; enter the per unit cost savings as a negative value). a. Prepare a differential and report for the proposed sale to Rio Motors. Round your answers to the nearest cent Miramar Tire And Rubber Company Sell to Rio Motors Differential Analysis Report Per Unit Total Differential revenue from accepting special offer Differential costs from accepting special offert (Enter per unit cost amounts as positive values, enter the per unit cost savings as a negative value). Total differential costs b. What is the minimum price per unit that would be financially acceptable to Miramar? Round your answer to the nearest cent

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