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eBook Print Item 6. Assume that as of August 1, 6,000 units of flat panel displays have been produced and sold during the current
eBook Print Item 6. Assume that as of August 1, 6,000 units of flat panel displays have been produced and sold during the current year. Analysis of the domestic market indicates that 4,800 additional units are expected to be sold during the remainder of the year at the normal product price determined under the product cost concept. On August 3, Crystal Displays Inc. received an offer from Maple Leaf Visual Inc. for 1,800 units of flat panel displays at $270.00 each. Maple Leaf Visual Inc. will market the units in Canada under its own brand name, and no yariable selling and administrative expenses associated with the sale will be incurred by Crystal Displays Inc. The additional business is not expected to affect the domestic sales of flat panel displays, and the additional units could be produced using existing factory, selling, and administrative capacity. a. Prepare a differential analysis of the proposed sale to Maple Leaf Visual Inc. If an amount is zero, enter zero "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Reject Order (Alt. 1) or Accept Order (Alt. 2) Revenues Costs: Variable manufacturing costs Profit (loss) Feedback August 3 Reject Order Accept Order Differential Effects (Alternative 1) (Alternative 2) (Alternative 2)
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