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E8-20A (similar to) Question Help Ace Industrios has an annual plant capacity of 62,000 units, current production is 53,000 units per year. At the current
E8-20A (similar to) Question Help Ace Industrios has an annual plant capacity of 62,000 units, current production is 53,000 units per year. At the current production volume, the variable cost per unit is $31.00 and the fixced cost per unit is $3.BD. The normal selling price of Ace's product is $46.0 por unit Ace has been asked by Dexter Company to fill a special order for 5,000 units of the product at a special sales price of S27.00 per unit. Dexter is located in a foreign country where Ace doos not currently operate Dexter will markct the units in its countr under its own brand name, s0 the special crder is not expected to have any effect on Ace's regular sales Read the rsouiamenls. Requirement 1. How would accepting the special order impact Ace's operating incorie? Shculd Ace accept the special order? Complete the tollcwing incremental analysis to detemine the impact on Ace's operating income it t accepts this special order. (Enter a o tor any zero balances. Use parentheses or a minus sign to indicate a decrease in contribution margin andlor operating income trom the special order ) Total Order Incremental Analysis of Special Sales Order Decision (5,000 units) Revenue fron special order Less expenses associaled with the order Variable manufacturing cost Contribution margin Less. Additional fixed expenses associatod with the order Increase (decrease) in operating income from the special order
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