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Down Home Jeans Co. has an annual plant capacity of 66,800 units, and current production is 46,200 units. Monthly fixed costs are $39,100, and
Down Home Jeans Co. has an annual plant capacity of 66,800 units, and current production is 46,200 units. Monthly fixed costs are $39,100, and variable costs are $25 per unit. The present selling price is $32 per unit. On November 12 of the current year, the company received an offer from Fields Company for 16,200 units of the product at $28 each. Fields 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 Down Home Jeans Co. a. Prepare a differential analysis dated November 12 on whether to reject (Alternative 1) or accept (Alternative 2) the Fields order. If an amount is zero, enter zero "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign.
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