Exercise 4.39 (Algo) Pricing Decisions (LO -- 1, 2) Rutkey Collectibles is a small toy company that manufactures and sells metal replicas of classic cars. Each car sells for $3.05 The cost of each unit follows: Materials Labor Variable overhead Fixed overhead ($17,800 per month, 17,800 units per month) Total costs per unit $1.ee 0.2e 0.60 1.ee $2.80 es One of Rutkey's regular customers asked the company to fill a special order of 500 units at a selling price of $2.05 per unit Rutkey's can fill the order using existing capacity without affecting total fixed costs for the month. However, Rutkey's manager was concerned about selling at a price below the $2.80 cost per unit and has asked for your advice. Required: a. Prepare a schedule to show the impact of providing the special order of 500 units on Rutkey's profits in addition to the regular production and sales of 17,800 units per month b. Based solely on the data given, what is the lowest price per unit at which the model cars could be sold for the special order without reducing Rutkey's profits? c. If Rutkey Collectibles company was operating at capacity, what would happen to operating profit if the special order was accepted? Complete this question by entering your answers in the tabs below. Required A Required B Required Prepare a schedule to show the impact of providing the special order of 500 units on Rutkey's pr production and sales of 17,800 units per month. (Select option "higher" or "lower, keeping Stat "none" if there is no effect.) Status Quo 17.00 Cars Alternative 1R 300 Cars Difference a selling price of $2.05 per unit Rurkey's can till the order using existing capacity without affecting total fixed costs for the month. However, Rutkey's manager was concerned about selling at a price below the $2.80 cost per unit and has asked for your advice. Required: a. Prepare a schedule to show the impact of providing the special order of 500 units on Rutkey's profits in addition to the regular production and sales of 17,800 units per month b. Based solely on the data given, what is the lowest price per unit at which the model cars could be sold for the special order without reducing Rutkey's profits? c. If Rutkey Collectibles company was operating at capacity, what would happen to operating profit if the special order was accepted? Book Complete this question by entering your answers in the tabs below. erences Required A Required B Required Prepare a schedule to show the impact of providing the special order of 500 units on Rutkey's pr production and sales of 17,800 units per month. (Select option "higher" or "lower", keeping Stat "none" if there is no effect.) Status Quo 17,800 Cars Alternative 18,300 Cars Difference Sales revenue Less variable costs: Materials Labor Variable overhead Total variable cost Contribution margin Less Fixed costs Operating promet $ 0 $ Required Required B > Fixed overhead ($17,800 per month, 17,800 units per Total costs per unit $2.89 One of Rutkey's regular customers asked the company to fill a special order of 500 units at a selling price of $2.05 per unit. Rutkey's can fill the order using existing capacity without affecting total fixed costs for the month. However. Rutkey's manager was concerned about selling at a price below the $2.80 cost per unit and has asked for your advice. ook Required: a. Prepare a schedule to show the impact of providing the special order of 500 units on Rutkey's profits in addition to the regular production and sales of 17,800 units per month b. Based solely on the data given what is the lowest price per unit at which the model cars could be sold for the special order without reducing Rutkey's profits? c. If Rutkey Collectibles company was operating at capacity, what would happen to operating profit if the special order was accepted? rences Complete this question by entering your answers in the tabs below. Required A Required B Required Based solely on the data given, what is the lowest price per unit at which the model cars could b without reducing Rutkey's profits? (Enter your answer to 2 decimal places.) Lowest price per car One of Rutkey's regular customers asked the company to fill a special order of 500 units at a selling price of $2.05 per unit. Rutkey's can fill the order using existing capacity without affecting total fixed costs for the month. However, Rutkey's manager was concerned about selling at a price below the $2.80 cost per unit and has asked for your advice. Required: a. Prepare a schedule to show the impact of providing the special order of 500 units on Rutkey's profits in addition to the regular production and sales of 17,800 units per month b. Based solely on the data given what is the lowest price per unit at which the model cars could be sold for the special order without reducing Rutkey's profits? c. If Rutkey Collectibles company was operating at capacity, what would happen to operating profit of the special order was accepted? K nces Complete this question by entering your answers in the tabs below. Required A Required B Required c If Rutkey Collectibles company was operating at capacity, what would happen to operating profit accepted? increase Decrease No change
