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Decision on Acting Additional Business Tuladega Tire and Rubber Company has capacity to produce 500.000 tires Talladega presently produces and set 400,000 tires for the
Decision on Acting Additional Business Tuladega Tire and Rubber Company has capacity to produce 500.000 tires Talladega presently produces and set 400,000 tires for the North American market at a price of 1.200 pertire. Teleserye speciale from turopean automobile company, Autobahn Motors Autobahn is offering to buy 100,000 tires for $150 per tire. Talladega's accounting system indicates that the total cost per tire is as follow Direct materials Direct labor Factory overhead (70% variable) Selling and administrative expenses (60% variable) Total $75 20 30 10 5143 Talades pays a welling commission equal to of the selling price on North American orders, which is included in the variable portion of the deling and we expenses were order would not have wales commission. If the order was accepted, the tires would be shipped overseas for national shipping cost of 33 per tre. In addition, Autobahn has made the order conditionat on receiving furopean alty cartoon Talladega estimates that this certification would cost $400,000 .. Prepare a diferential analys dated July 31 on whether to reject (Alternative }) or accrot (Alternative 2) the special order from anobahn Motors. We amount is erroresired, round interim calculation two decimal places Differential Analysis Reject Order (Art. 1) or Accept Order (Alt. 2) July 31 Reject Accept Differential Order Order Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues Costa Dret materials Direct labor Variable factory overhead Variable and adminis Shipping costs Certifications Determine whether terect (Alternative 1) or ce trente) e pealeder from Auto Motor was the minimum aperust that would be financially acceptere to Tuladega Hound your answer to two decimal pas OW Analysis Reject Order (Alt. 1) or Accept Order (Alt. 2) July 31 Reject Accept Differential Order Order Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues Costs: Direct materials Direct labor Variable factory overhead Variable selling and admin. expenses Shipping costs Certification costs Profit (Loss) Determine whether to reject (Alternative 1) or accept (Alternative 2) the special order from Autobahn Motors. b. What is the minimum price per unit that would be financially acceptable to Talladega? Round your answer to two decimal places. per unit
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