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Oliver Corp produces washers. Their newest product sells for $900. The company produces and sells 4,200 units per year. Cost data follows: Variable manufacturing $450
Oliver Corp produces washers. Their newest product sells for $900. The company produces and sells 4,200 units per year. Cost data follows: Variable manufacturing $450 per unit Variable selling and administrative $100 per unit Fixed manufacturing $600,000 per year Fixed selling and administrative $220,000 per year A potential deal has come up for a one-time sale of 20 units at a special price of $650 per unit. The sale will not negatively impact the company's regular sales activities and will require the normal variable manufacturing costs and selling and administrative costs. There is plenty of excess capacity and the deal will not impact fixed costs. Create a Differential Analysis of a Special Pricing Decision showing the expected increase or decrease in operating income if this order is accepted. You can see a sample analysis in Chapter 25, Exhibit 25-5. This assignment is worth 15 points overall, 9 points for proper setup, 3 points for correct final answer, 3 points for formulas. When your file is ready to submit, click on "Graded: Learning Unit 4, Ch 25 Special Pricing Decision" above. In the next screen, attach your file. This assignment must be submitted in EXCEL with formulas in at least two cells
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