Decision on Accepting Adrional business B 117,000 tires for the North Amecamat a price of $109 per s ones g r ans the pers per Brightone is in eton Ted Rubber Company has capacity to produce 153,000 tres t ne presne produces and a special order from a treatment commune Motor turistering to buy 1,000 for Direct materials Direct label Factory overhead (60% arabe) Sering and ac t ive expenses ) Brightone pas selling commonewal te of the selling price on North American orders induded in the warble portion of these ortation angstons estimates that this certification would cost $104.400 and di v er s e order emove 1) or Alive 2) the Prepare aderanalyse dated Manuary 21 on whether to r cations to the decimal places Differential Analysis Reject Order (A1) or Act Order ( A2) r e from tur Motor anonte me d round ( Amativ 1) ( Amative 2) on Inc e ntive 2) Direct materials compenses 21 1 ) ve l der from tur Motors Wante , entre "U". It required, round interim Differential Naject Order ( A1) Acorder ( A2) Dia (Alternative 1) ( A mative 2) 11,73.00 110 Income ( 1.5 100 2) Income DIFFERENTIAL ANALYSIS Reject order(Alt.1) 1.27.53,000 $ Accept order(Alt.2) 1.43.18.100 S Differential effect 15.65.100 Particulars Revenues Costs Direct Materials Direct labor Variable Factory overhead Variable selling and admin expenses Shipping costs Construction Costs Income Los) 47,97,000 $ 17.55,000 $ 17.55.000 S 7,72,200 $ 55,35.000 20.25.000 S 20.25,000 $ 8,12,745 1.ON.000 S 1.0.400 S 37,07,955 S 738.000 2.70.000 270.000 40545 1.000 1.04.400 34.155 16,71,NOOS Since the Net Income by accepting the order is more than that of Rejecting order hence the company should ACCEPT THE ORDER Minimum Transfer Price (S10,397,745/ 135,000) + (S212,400 / 18000) Minimum Transfer Price $77.02 S118-58882