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Perry lndustries has an annual plant capacity of 70,000 unts; current production is 57,000 units per year. At the current production volume, the variable cost
Perry lndustries has an annual plant capacity of 70,000 unts; current production is 57,000 units per year. At the current production volume, the variable cost per unit is $26.00 and the fived cost per unit is $4.80. The normal seling price of Perry's product is $47.00 per unit. Perry has been asked by Caldweil Company to fil a special order for 11,000 units of the product at a special sales price of $22.00 per unit. Caldwell is located in a foreign country where Perry does not currently operate. Caldwell will market the units in its country under its oan. brand name, so the epecial order is not expected to have any effect on Perry's regular sales. Read the reauiremente 1 . Requirement 1. How would acoepting the special order impact Perry's aperating inoome? Should Perry aocept the special order? Complete the following incremental analysis to determine the impact on Perry's operating income it it accepts this special order. (Enter a "g" for any zero balances. Use parentheses or a minus sign to indicate a decrease in contribution macgin andior operating income from the special order.] Perty (1) acoept the special sales order because it will (2) operating income. Requirement 2. How would your analysis change if the special order sales price were to be 544.00 per unit and Perry would have to pay an attorney a fee of $14,000 to make sure it is complying with export laws and regulations relating to the special order? (Enter a "or for aryy zero balances. Use parentheses or a minus sign to indicate a decrease in contribution margin andlor operating income from the special order.) Perry (3) acoept the special sales order because it will (4) operating income. 1: Requirements 1. How would acoepting the special order impact Perry's aperating income? Should Perry aocept the special order? 2. How would your analysis change if the special order sales price were to be $44.00 per unit and Pemy would have to pay an attorney a fee of $14,000 to make eure it is complying with export laws and regulations relating to the special order
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