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Dunbar Industries has an annual plant capacity of 68,000 units; current production is 57,000 units per year. At the current production volume, the variable cost
Dunbar Industries has an annual plant capacity of 68,000 units; current production is 57,000 units per year. At the current production volume, the variable cost per unit is $32.00 and the fixed cost per unit is $4.20. The normal selling price of Dunbar's product is $41.00 per unit. Dunbar has been asked by Bramwall Company to fill a special order for 5,000 units of the product at a special sales price of $21.00 per unit. Bramwall is located in a foreign country where Dunbar does not currently operate. Bramwall will market the units in its country under its own brand name, so the special order is not expected to have any effect on Dunbar's regular sales. Read the requirements Requirement 1. How would accepting the special order impact Dunbar's operating income? Should Dunbar accept the special order? Complete the following incremental analysis to determine the impact on Dunbar's operating income if it accepts this special order. (Enter a "O" for any zero balances. Use parentheses or a minus sign to indicate a decrease in contributic_-..- -- at??--?? ..-..- --.- Requirements Incremental Analysis of Special Sal Revenue from special order Less expenses associated with the order: Variable manufacturing cost Contribution margin Less: Additional fixed expenses associated w Increase (decrease) in operating income from How would accepting the special order impact Dunbar's operating income? Should Dunbar accept the special order? How would your analysis change if the special order sales price were to be S37.00 per unit and Dunbar would have to pay an attorney a fee of $13,000 to make sure it is complying with export laws and regulations relating to the special order? 1. 2. Print Done Dunbar Industries has an annual plant capacity of 68,000 units; current production is 57,000 units per year. At the current production volume, the variable cost per unit is $32.00 and the fixed cost per unit is $4.20. The normal selling price of Dunbar's product is $41.00 per unit. Dunbar has been asked by Bramwall Company to fill a special order for 5,000 units of the product at a special sales price of $21.00 per unit. Bramwall is located in a foreign country where Dunbar does not currently operate. Bramwall will market the units in its country under its own brand name, so the special order is not expected to have any effect on Dunbar's regular sales. Read the requirements Requirement 1. How would accepting the special order impact Dunbar's operating income? Should Dunbar accept the special order? Complete the following incremental analysis to determine the impact on Dunbar's operating income if it accepts this special order. (Enter a "O" for any zero balances. Use parentheses or a minus sign to indicate a decrease in contributic_-..- -- at??--?? ..-..- --.- Requirements Incremental Analysis of Special Sal Revenue from special order Less expenses associated with the order: Variable manufacturing cost Contribution margin Less: Additional fixed expenses associated w Increase (decrease) in operating income from How would accepting the special order impact Dunbar's operating income? Should Dunbar accept the special order? How would your analysis change if the special order sales price were to be S37.00 per unit and Dunbar would have to pay an attorney a fee of $13,000 to make sure it is complying with export laws and regulations relating to the special order? 1. 2. Print Done
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