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Exercise 4-35 Special Orders (LO 4-1.2) Maria's Fand Service provides meals that nonprofit organ zations distribuin handicapped and alderly peonin. Here is har forneasted income
Exercise 4-35 Special Orders (LO 4-1.2) Maria's Fand Service provides meals that nonprofit organ zations distribuin handicapped and alderly peonin. Here is har forneasted income statement for Anri, when she expects paradurn and snil 4,000 moals: Sale Teen Costs of MRAIA Cauca Autouni 5 28,000 20,000 000 3200 3 4.800 Per Uril $ 700 5.00 200 3 Operating and it $ 1.20 Flxed costs incluced in this income statement are $8.000 for meal production and $800 for administrative ooste, Marte he received Apoll request from an organization sponsoring a picnic to raise funds for the Special Olympics. This organization is willing to pay $4.00 per mcal far 300 meals an Apri 10. Maria has suficient idle capacity to fill this special arder. These meals wil incur all of the variable costs meals produced, but variable administrative casts and total fixed costs wil not be affected. Required: a. What impact would accepting the special order have on operating profil? Select option "higher" or "lower" keeping Status Quo as the base Select "none" if there is no effect.) 4,000 Units 4,300 Units Difference Variable costs: Meals Administrative Contribution margin Flxadas Operating profit b. From an operating proht perspective for April, should Marle accept the order? No
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