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Perry Industries has an annual plant capacity of 69,000 units; current production is 54,000 units per year. At the current production volume, the variable
Perry Industries has an annual plant capacity of 69,000 units; current production is 54,000 units per year. At the current production volume, the variable cost per unit is $29.00 and the fixed cost per unit is $4.80. The normal selling price of Perry's product is $50.00 per unit. Perry has been asked by Abbott Company to fill a special order for 13,000 units of the product at a special sales price of $21.00 per unit. Abbott is located in a foreign country where Perry does not currently operate. Abbott will market the units in its country under its own brand name, so the special order is not expected to have any effect on Perry's regular sales. Read the requirements. Requirement 1. How would accepting the special order impact Perry's operating income? Should Perry accept the special order? The special order will Perry's operating income by $ accept the special sales order. Thus, Perry Requirements 1. How would accepting the special order impact Perry's operating income? Should Perry accept the special order? 2. How would your analysis change if the special order sales price were to be $45.00 per unit and Perry would have to pay an attorney a fee of $13,000 to make sure it is complying with export laws and regulations relating to the special order? Print Done
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